Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — Oral Answers to Questions

Mr. Speaker: Order. I remind the House that long supplementary questions limit the number of main questions that can be called.

ENVIRONMENT

Litter Act 1958

Mr. Michael McNair-Wilson: asked the Secretary of State for the Environment if he will seek to amend the Litter Act 1958 to make it more effective.

The Under-Secretary of State for the Environment (Mr Giles Shaw): The maximum fine for an offence under the Litter Acts of 1958 and 1971 has recently been increased to £200, and we are currently consolidating these Acts with other litter provisions in existing legislation.
I see no need to amend this legislation for the purpose suggested by my hon. Friend.

Mr. McNair-Wilson: Does my hon. Friend agree that the Litter Acts are not being enforced, as much as anything because the police have so many other things to do and prosecutions are expensive? Should not the Litter Acts be amended to enable local authorities to appoint litter wardens, as happens in the Irish Republic, with the right to impose on-the-spot fines?

Mr. Shaw: I accept that it is not always easy to enforce the Litter Acts, but I remind my hon. Friend that each year about 2,000 prosecutions take place under the Acts. The imposition of direct fines would involve many constitutional issues. Implementation of section 24 of the Control of Pollution Act 1974 would provide additional powers for local authorities.

Dr. David Clark: Has the Minister read the report of the Keep Britain Tidy Group on marine litter, which found evidence of widespread litter dumping on the beaches round our island? I know that the Secretary of State may not be interested, but many people take holidays in this island. Is the Minister prepared to take action to ensure that those beaches are cleaned up?

Mr. Shaw: I think that the hon. Gentleman is referring to a report about beaches by the Coastal Anti-Pollution League, which gained publicity in the morning papers. If he is referring not to that report but to a report by the Keep Britain Tidy Group, I should inform him that we have taken immense steps, in particular with the local authorities, to try to improve the situation. Of 14 beaches

expected to need derogations under the EC directive, only four were in fact submitted, so there has been an improvement.

House Building

Mr. Parry: asked the Secretary of State for the Environment how many local authority housing starts there were in the first three months of 1983; and what was the equivalent figure for the same period in 1980.

The Minister for Housing and Construction (Mr. John Stanley): Figures for March are not yet available, but provisional house building starts for English local authorities in the first two months of 1983 were 6,400, compared with 5,400 in the corresponding period in 1980.

Mr. Parry: Is the Minister aware that, in the Liberal-controlled Liverpool city council area, there were no housing starts in 1981, 233 in 1982 and only 150 in 1983? Is he further aware that Liverpool city council has a housing waiting list of more than 25,000 and that aged —some in their mid-eighties—and handicapped people are living in the top floor flats of pre-war tenement blocks without hope of being rehoused? Will the Minister urge the council to build houses for rent for those in need`?

Mr. Stanley: The issue in Liverpool is not merely the building of additional houses, but of making use of existing local authority housing stock. In Liverpool, 1,330 dwellings have been vacant for more than a year. I hope that the local authority will make every possible attempt to make better use of its existing stock.

Mr. Alton: Will the Minister confirm that the Government cut housing support in Liverpool by £7 million last year? Is he aware that until that is restored it will be impossible to do anything about many of the vacant dwellings? What does he intend to do about the 500,000 homes in Britain which still do not have inside toilets, running hot water and bathrooms, and need money for restoration and renovation?

Mr. Stanley: I must point out to the hon. Gentleman and the Liberal party in Liverpool that Liverpool city council has been a conspicuous underspender. The crucial need in Liverpool is for full utilisation of the resources that have been made available. The Liverpool city council underspent in 1981–82 and it appears that it has produced an increased underspend in 1982–83. The local authority should make better use of its stock and full use of its resources.

Mr. Heddle: As my hon. Friend has confirmed that housing problems can be solved by better utilisation of the existing housing stock, does he not view with alarm the fact that at least two, possibly three, or more, properties in the constituency of the right hon. Member for Manchester, Ardwick (Mr. Kaufman) have been empty for more than six years? Does he agree that the Department should monitor the number of empty houses which the local authorities have and compel them to let immediately to those who deserve the right to rent?

Mr. Stanley: I am grateful to my hon. Friend. I assure him that the HIP returns for all local authorities, copies of which are in the Library, show the number of empty dwellings, including those that have been empty for more than a year. I share his concern that the last set of returns showed that about 19,000 local authority dwellings in England had been vacant for more than a year.

Mrs. Ann Taylor: In view of the Prime Minister's claim yesterday that the construction of new housing is improving, will the Minister confirm the depth to which such construction had sunk? Was not the Labour Government's worst year for council house building better than the Tory Government's two best years put together?

Mr. Stanley: The hon. Lady should look at the totality of housing. The House will be glad to know that this year the Housing Corporation expects a record number of Housing Corporation-funded housing association dwellings to be completed. Private house building and home improvement grants are at a 10-year high, hostel approvals are now three times higher than under the Labour Government and grants for the disabled are five times higher than under the Labour Government. In total, the Government's housing record has been a conspicuous success.

Local Government Financing

Mr. Chapman: asked the Secretary of State for the Environment if he is satisfied with the present method of financing local government, including the rate support grant allocation.

The Secretary of State for the Environment (Mr. Tom King): We have been reviewing the present rating system and intend shortly to bring forward new proposals.

Mr. Chapman: In any new arrangement, will my right hon. Friend try to ensure as far as practicably possible that all people pay for local government services according to their needs? Is not an inherent weakness and unfairness of the present rating system the fact that a minority are always asked to foot the Bill for the ever-increasing demands of a non-paying majority?

Mr. King: That is one aspect of the criticisms of the unfairness of the rating system that has been very much in our mind, together with our concern about the demands made on a number of ratepayers by the most irresponsible Labour authorities, which appear to have no regard to the problems facing their industrial, commercial and domestic ratepayers.

Mr. Kaufman: What proportion of this year's rate increases is due to the Government's reduction in rate support grant and housing subsidies by £9,000 million?

Mr. King: As I told the House yesterday—I know that the right hon. Gentleman listened with great interest —except for the GLC and ILEA and another 16 Labour authorities, which pushed the average up to 6·5 per cent., there were no rate increases this year.

Mr. Beaumont-Dark: Does my right hon. Friend agree that many people living alone have a genuine grievance against those households in which there are often five or six high wage earners? In spite of all the complications, should we not look seriously at the possibility of a poll tax, when the new computer comes in, as such a tax could be collected on a PAYE basis, thereby permitting greater equity between those on high incomes and pensioners who live alone in similar houses?

Mr. King: That is an interesting suggestion. I know that my hon. Friend would be the first to emphasise that, in looking at the way in which funds are raised, it is important to ensure that the demands made are kept as low

as possible. I know that he will join me in welcoming the achievements of the Conservative-controlled Birmingham city council, which has reduced its rates by 12·5 per cent.

Mr. Kaufman: I am sure that the Secretary of State would not wish to mislead the House. Therefore, will he comment on the complaint by Surrey county council that 8 per cent. of its 13·7 per cent. rate increase this year is due to the withdrawal of Government grant?

Mr. King: This is a new departure. I have heard of right hon. Members coming back when they cannot think of an answer to the response that they have received, but following a pause the right hon. Gentleman has come back on an entirely different matter. I know that I speak on behalf of all the ratepayers of Surrey who much prefer their rate poundages this year to those imposed by the right hon. Gentleman's authority in Manchester.

Mr. R. C. Mitchell: Does the right hon. Gentleman expect rating reform to appear in the 1983 Conservative manifesto as it did in the 1979 Conservative manifesto?

Mr. King: I was not aware that it had been announced that we shall have a 1983 Conservative manifesto.

Mr. John Townend: When considering changes, will my right hon. Friend examine the possibility of abolishing completely the industrial and commercial rate and replacing the lost revenue by increasing other corporate taxes and paying local authorities by block grant, thereby making ordinary domestic ratepayers responsible for all marginal expenditure?

Mr. King: My hon. Friend will know that we have conducted a comprehensive review, and he will be pleased to learn that we have excluded nothing from it.

Municipal Housing

Mr. Leighton: asked the Secretary of State for the Environment what is his policy towards the future ownership and administration of estates owned by local authorities outside their areas.

The Under-Secretary of State for the Environment (Sir George Young): The Government's view is that it is generally preferable for municipal housing to be owned and managed by the authority in whose area it lies.

Mr. Leighton: Why did the Department hold referendums in the Newham estates in Hutton and Elm Park, which produced overwhelming majorities to stay with Newham, only to ignore the results completely? Is the Minister aware that many of the elected representatives of Newham feel that they are being robbed of valuable property that is central to their housing strategy and that that has resulted in bitterness and anger? Will the hon. Gentleman review his policy and make the wishes of the tenants paramount?

Sir George Young: We took into account the views of the tenants expressed in the referendums before we announced our decision, but localised management accessible to the tenants is likely to be of a higher standard than remote management. Inevitably, when an estate is managed by an authority outside the local authority area in question, it is more likely to be remote, whereas if it is managed by the local authority in whose area it is situated, it can be more closely integrated with the other services that the local authority provides. For those two reasons, I believe that the decision was correct.

Mr. McCrindle: Does my hon. Friend accept that many tenants on the Newham estate in Brentwood welcome the prospect of becoming tenants of the local authority to which they already pay their rates, thereby increasing their identification with the local community? Will he press on regardless with his intentions?

Sir George Young: My hon. Friend makes a worthwhile point that the existing Brentwood tenants are well satisfied with the services provided by that local authority. I am confident that were another referendum to be conducted in a few years' time, tenants would be equally satisfied with the services that they had received from their new landlord.

Mr. Arthur Lewis: We are not talking about a few years' time. The Minister has admitted that in a referendum 75 per cent. of tenants said that they were quite happy with things as they are. How can he fail to take that into consideration? Does that mean that if 75 per cent. of the Cowley workers decided to go back to work he would say, "Take no notice. Remain on strike"?

Sir George Young: As I have explained, the views of the tenants expressed in the referendum was one of the factors that we took into account. In the context of the actual number of tenants eligible to vote, the number voting to stay with Newham fell to about 58 per cent. For the reasons that I have given, it makes sense for the estates to be managed by the local authority in whose area they lie

Mr. Squire: Is my hon. Friend aware that within the past five years the London borough of Havering, within which the Elm Park estate lies, has transferred about 300 homes to other authorities because they were without its boundaries and in pursuance of the logic that all council homes should be within one area? Moreover, the service given by the London borough of Newham to many of my constituents who tried to purchase and had to wait a long time does not put that authority in the best position to put itself forward as advancing the interests of its tenants.

Sir George Young: My hon. Friends have an important role to play in assuring the tenants of the high quality service that they will receive from their new landlords.

Mr. Leighton: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of that reply, I shall seek to raise the matter on the Adjournment at the earliest possible opportunity.

Litter

Mr. Ogden: asked the Secretary of State for the Environment if he will now increase the amount of money available to local authorities, especially to those in urban areas, for the reduction, collection and disposal of litter from roads and streets.

Mr. Giles Shaw: It is for individual local authorities to determine, within their overall budgets, the resources they allocate to carrying out their street cleaning responsibilities. Education and persuasion of the public not to drop litter is the key to solving the problem of littering. In this respect I recommend to the House the work of the Keep Britain Tidy Group, which we actively support. In particular, I commend the Keep Britain Tidy system for adoption by local authorities.

Mr. Ogden: Will the Minister now try to give a positive and enthusiastic reply? Does he agree that too many of our roads, streets and public places are tatty at best and too often downright filthy? Is it not time that an Environment Minister started a "Spring-clean Britain" operation to encourage those who want to take care of their environment to respect and take pride in it and to discourage those who think that the only place to dump their garbage or litter is down on the big hook?

Mr. Shaw: I accept the hon. Gentleman's view that it is high time we motivated people to take more care of and have more pride in their communities. For that reason the Keep Britain Tidy Group has launched the "Beautiful Britain '83" campaign, and I am currently reviewing the central funds with which we support the group, because I commend its activities and would seek ways of increasing them.

Mr. Neubert: Is my hon. Friend aware that among the worst examples of littering in Romford are cars parked on verges and excrement parked on pavements? Can he promise any higher priority to those problems?

Mr. Shaw: My hon. Friend raises a matter which is for my colleagues at the Ministry of Transport rather than for me. On the other point he raises, the local authority is still the prime source of help in dealing with those nuisances.

Mr. Parry: Is the Minister aware that the privatisation of the refuse collection in Liverpool is strongly opposed by the trade union movement and that a future Labour-controlled council will reverse that policy?

Mr. Shaw: It does not surprise me to hear that. It is inevitable that many people will take a view such as the hon. Gentleman has expressed. It is equally inevitable that most councils which have changed to privatisation have shown substantial savings for their ratepayers and a greatly improved service.

Public Inquiries

Mr. Haselhurst: asked the Secretary of State for the Environment whether he is satisfied with the financial arrangements pertaining to public inquiries for which his Department is responsible; and if he will make a statement.

Mr. Giles Shaw: The arrangements are that accommodation for a public inquiry is normally provided by the local authority, which, in some types of case, may also be expected to meet the Department's costs. Parties to an inquiry are normally expected to meet their own costs, but one party may be ordered to pay another party's costs where these have been incurred because of unreasonable conduct. I regard these arrangements as satisfactory.

Mr. Haselhurst: Is my hon. Friend telling the House that it is either satisfactory or equitable that the daily transcripts of the current airports inquiry, should be charged to interested parties at £7·50 a day, whereas for an inquiry of equal national importance, that at Sizewell, such transcripts are provided free?

Mr. Shaw: I remind my hon. Friend that the Stansted inquiry is being conducted under the auspices of my right hon. Friend and the Department and that we are abiding by our traditional rules regarding the availablity of services


to those who are involved in the inquiry. All witnesses can examine the transcript free of charge. The Sizewell inquiry is being conducted under the auspices of the Electricity Act 1957, and it has long been a practice of the Secretary of State for Energy, through the CEGB, to direct that costs of this kind are met.

Televised Football

Mr. Weetch: asked the Secretary of State for the Environment whether he has had any consultation with the Football League or the joint ITV/BBC committee regarding the future prospects of televised football.

Mr. Robert C. Brown: asked the Secretary of State for the Environment whether he will consult the football authorities about the future of televised football.

The Under-Secretary of State for the Environment (Mr. Neil Macfarlane): The televising of football is a matter for the football and television authorities. Recognising, however, the considerable public interest in recent developments, I have been in touch with both sides. I hope that a satisfactory agreement can be reached, as I believe that the game and the public are best served by some continuation of the present arrangements.

Mr. Weetch: I thank the Minister for that answer. Does he realise that there is a great deal of serious public concern about the possibility of football matches disappearing from television screens and going into public houses on video? Does he further realise that that would be a blow to family viewing and that it is undesirable for football as a spectator sport to be linked with the sale of alcohol? Will he continue to use his good offices to see that some other financial solution to the difficulty is found?

Mr. Macfarlane: I cannot undertake to achieve the hon. Gentleman's last request, because that is very much a matter for the Football League and television authorities. Negotiations are still continuing. As for his assessment of the overall impact of football, I strongly sympathise with his views. I think that the combination of the alternative facilities which are being suggested are certainly not conducive to all that we have been trying to ensure for the future of this great national game of ours.

Mr. Brown: Does the Minister agree that it would be an absolute scandal if children, the elderly, the sick, the disabled and the needy were prevented from viewing televised football, our national sport? Is he aware that the Football League has rejected what would have been an increase of 16 per cent. on the 1979 agreement and that in that period there has been an increase in the rate of inflation of 60 per cent.? Does he not feel that shirt advertising would be the answer to the problem?

Mr. Macfarlane: Shirt advertising is very much a matter for the BBC and ITA. Sometimes I cannot help feeling that Opposition Members are closer to the source of influence than I am on some of the negotiations, and they may feel that they have greater influence in some of these matters. I believe that the hon. Gentleman has voiced the disquiet that is felt by many people—that if we are still trying to envisage the success of football not only as a family entertainment but as a means of sustaining the game outside the professional levels, it is best served by the continuation of the present arrangements.

Sir Hector Monro: While appreciating that it is not my hon. Friend's direct responsibility, may I ask him to knock heads together a little harder so that the British public can see football on a limited scale on television at home? Does he agree that it really is not acceptable that, to see a recorded television match, one must go to a public house or a public place?

Mr. Macfarlane: These exchanges have been most useful. I believe that those outside this House who are responsible for conducting the negotiations will take note of the general view of hon. Members. I personally hope that they will echo the sentiments expressed this afternoon.

Mr. Hoyle: Will the Minister call a meeting of the Football League and television authorities and put it to them strongly that millions of people want to see football continue to be shown on television and that the gap between them is not large? If he uses his good offices in that way and seizes the initiative, I am sure we can keep football on the TV screens.

Mr. Macfarlane: One must remember the locus of the Minister with responsibility for sport in these affairs. I assure the House that I have had detailed meetings—as indeed have my officials, on more than one occasion—with representatives of the BBC, IBA and the Football League. Meetings are to take place later this week, and I shall certainly draw to the attention of those representatives what has been said in the House today.

Mr. Squire: Will my hon. Friend nevertheless undertake to resist any calls for grants to be made available for those who suffer from deprivation of televised football?

Mr. Macfarlane: I take note of my hon. Friend's comment.

Mr. Denis Howell: Does the Minister appreciate that we welcome his intervention in a matter of great public concern? Will he intervene even further if necessary, supporting the Office of Fair Trading, which is reported today to be intervening because the public interest would not be served if young people, the housebound and the ill in our society were prevented from watching football without having to enter licensed premises? There is much disquiet about that. On the other hand, I hope the Minister has represented to the television authorities that they should pay an adequate sum for the hours of television they get and, if necessary, relax their advertising rules about shirt advertising to bring them in line with other sport to provide the financial assistance which football needs. Is the Minister aware that we will support any initiative he takes to bring that about?

Mr. Macfarlane: I am grateful to the right hon. Gentleman for those observations. I shall certainly maintain the closest contact with the individual authorities in the ensuing 48 hours. As for the Office of Fair Trading, the right hon. Gentleman must understand that this is primarily the responsibility of my right hon. and noble Friend the Secretary of State for Trade. I counsel the right hon. Gentleman not to believe all that he read in one newspaper today. I understand that the Office of Fair Trading has yet to receive any draft documents, and clearly it has not been able to form a view. However, I take note of the right hon. Gentleman's comments.

Merseyside (Co-ordination)

Mr. Spriggs: asked the Secretary of State for the Environment if he is satisfied with the co-ordination between the programmes of central Government, Merseyside county council and St. Helens metropolitan borough council; and if he will make a statement.

Mr. King: Local authorities are responsible to their electorate and not to me. However, through my north-west regional office and the Merseyside task force, I am satisfied that there is full co-operation where appropriate with St. Helens borough council and Merseyside county council on a variety of programmes and initiatives.

Mr. Spriggs: Is the right hon. Gentleman aware that I am surprised at his answer? Since I would not be allowed by you, Mr. Speaker, to raise the many problems that lead to such serious lack of co-ordination between the Government, the Merseyside county council and the St. Helens metropolitan borough council, may I bring one matter to the right hon. Gentleman's attention? It concerns the correspondence that the borough treasurers had with him about the HIP, which falls about £2·2 million short of the requirement in the local authority's housebuilding programme. Will he have another look at that and, if necessary, accept my invitation to come up to St. Helens, meet the whole St. Helens council and all seven Members of Parliament?

Mr. King: I was there one month ago. I talked to the treasurer, the leader of the council and the chief executive about those matters. My hon. Friend the Minister for Housing and Construction has been in correspondence with them. The hon. Gentleman will know that coordination and reaching complete agreement on bids made by individual authorities are not necessarily the same thing. I am anxious to see how we can work together. I hope that we can achieve satisfactory arrangements over co-ordination.

Mr. Alton: Does the Secretary of State accept that the best service that he could render to people in St. Helens and the other four district councils on Merseyside would be to abolish the high-spending Merseyside county council?

Mr. King: That is another question. It does not relate to co-ordination with St. Helens.

Multiracial Sport

Mr. Hicks: asked the Secretary of State for the Environment whether there are any plans for discussion with his ministerial counterparts in other Commonwealth Governments to consider the implications of the commitments made at the Lusaka and Melbourne Commonwealth Heads of Governments meetings relating to multiracial sport; and if he will make a statement.

Mr. Macfarlane: No, Sir. The Commonwealth's commitment to multiracial sport remains as set out in the 1977 Commonwealth statement on apartheid in sport.

Mr. Hicks: In view of the contribution that sport makes to international relationships and understanding, does my hon. Friend agree that it would be traumatic, both for world sport and for Commonwealth sporting relationships, if a shortsighted decision were to be made, which would lead to England playing South Africa at cricket?

Furthermore, is it not a fact that if that were to happen all the other members of the International Cricket Conference would not follow our example, so that we would be left playing South Africa and South Africa alone, which would be very tedious?

Mr. Macfarlane: My hon. Friend has put his finger on a most important point, which creates grave disquiet in the minds of those who put multiracial sport first throughout the world. No one in the House should be in any doubt about the serious threat that would arise to organised cricket if a tour of South. Africa were to go ahead by the MCC, which is technically a private club. It was at the ICC that the MCC and its governing body, the Cricket Council, voted 13 years ago to exclude South Africa from the cricket itinerary.

Mr. Roy Hughes: Is this not an area where the Minister can usefully intervene and give guidance? Are there not many more areas in sport where help is very much needed at present? Would not the Minister's time be better spent on those functions rather than being turned into a children's nursemaid, which is the function that the Prime Minister seems to have in mind for him?

Mr. Macfarlane: Somehow I feel that this important subject has been deflected by the hon. Gentleman. I wish that he would take a closer interest in these important matters. The fact is that Her Majesty's Government acknowledge the principle of the Commonwealth statement on apartheid in sport, which was upheld in 1979 and 1981. There is no deviation from that concept.

Mr. John Carlisle: I take up the point that my hon. Friend made about the ICC. May I point out to him that the ICC went to South Africa in 1979 on a fact-finding mission and came back with a recommendation that an ICC team be sent to South Africa because of what it had seen? If my hon. Friend is so desirous, as I hope he is, of representing the interests of British sportsmen, will he go to South Africa to see for himself that sport is not organised on the basis of race, colour or ethnic origin? By seeing that for himself he will not have to rely, as he said on Radio 4 the other evening, on pictures and newspaper reports.

Mr. Macfarlane: I do not have quite the amount of time that my hon. Friend has to visit South Africa. My hon. Friends from the Foreign and Commonwealth Office undertake visits to South Africa. That is not part of my locus. I am certain that my hon. Friend does not wish to mislead the House. There was no ICC-ratified visit to South Africa in 1979. The ICC voted to exclude South Africa from its cricketing itinerary in 1969. The visit about 10 years later was not an ICC visit. Some people went to South Africa who happened to be representatives of the ICC.

Mr. Denis Howell: Will the Minister take note that we entirely support his view on this matter, that it would be absolutely disastrous for international cricket if this private tour went ahead, and that, as the hon. Member for Bodmin (Mr. Hicks) said, it would restrict, all our cricket matches to England versus South Africa? Will the Minister extend that thinking to Rugby Football Union? Does he agree that if the Rugby Football Union authorities are considering a public tour of the South Africa Rugby Union in two years'


time in exchange for an agreement by Dr. Craaven of South Africa not to let his private tour take place this year, that would be equally reprehensible?

Mr. Macfarlane: The Rugby Football Union is well aware of the Government's opposition to this possible venture. I hope that the Rugby Football Union committee will take account of our advice when it makes up its mind.

Council Houses

Mr. O'Brien: asked the Secretary of State for the Environment what is his latest estimate of the number of new council houses due for completion in 1983; and what is his estimate of the total stock of council houses at the end of 1983.

Mr.John Fraser: asked the Secretary of State for the Environment how many dwellings he estimates will be (a) started and (b) completed by local authorities in England in the current year.

Sir George Young: It is for local authorities to decide what priority to give to spending on council house building within their total available resources. My Department makes no estimates of the numbers of starts or completions.

Mr. O'Brien: Bearing in mind that answer, the totally inadequate answer that was given to my hon. Friend the Member for Bolton, West (Mrs. Taylor) and the false trumpeting about the housing record by the Prime Minister yesterday, when will the Minister admit that the Government's housing record is an unmitigated disaster? Is the Minister aware that in my constituency, which is a relatively small town, we have waiting lists of nearly 3,000 and that, because of the Government's financial restrictions, we shall be able to complete only between 70 and 100 dwellings this year? Is he aware that since 1979 we have been able to build only 276 dwellings, all for old-age pensioners? When will we return to the rate of building achieved under the Labour Government?

Sir George Young: After falling for every year since 1975, local authority starts increased by one third in 1982. That seems to be a useful step in the right direction. I hope that the hon. Gentleman will use his influence in Darlington to broaden the horizons of the Darlington council. At the moment the council has no plans to extend the initiative developed by the former Conservative-controlled Darlington council to have a partnership with the private sector. Last year it refused to attend a tripartite meeting with the House Builders Federation and my Department's regional office on the release of land register sites for low-cost home ownership schemes. I hope that the hon. Gentleman will use his influence to change the council's policy on that subject.

Mr. Latham: Was it not Mr. Anthony Greenwood, as he then was, when he was drastically cutting the housing programme as the Labour Minister responsible for housing, who first put forward the idea that the housing programme did not consist solely of building council houses but was made up of improvement grants, repair grants and many other initiatives?

Sir George Young: My hon. Friend is absolutely right. In England alone more than 190,000 dwellings were renovated in 1982 with the aid of grant or subsidy, which is the highest annual total since the period of office of the Conservative Government between 1972 and 1974.

Mr. Lofthouse: How much will the new dwellings cost? If the Government's proposals going through the other place at present are successful, the cost floor provisions are removed and the maximum discount is raised to 60 per cent., how much could a new tenant who qualified to buy at that discount pay for that dwelling?

Sir George Young: I think that the hon. Gentleman is under some misapprehension. The cost floor is not being removed and the 60 per cent. discount cannot bring the price below the cost to the local authority of the dwelling concerned.

Mr. Eggar: Is it not a scandal that so many Opposition Members and so many Labour authorities whinge on about building council houses but do not give proper priority to building for sale, improvements and other imaginative schemes?

Sir George Young: My hon. Friend is absolutely right. The building of local authority dwellings for rent is but one aspect of meeting housing need. The estimated increase in the number of owner-occupied dwellings during this Parliament already exceeds that in any other post-war Parliament apart from the Conservative Administrations of 1955 to 1959 and 1959 to 1964.

Mrs. Ann Taylor: As the total stock of council houses, to which the question relates, will be reduced still further if the Housing and Building Control Bill is passed, and in view of the Government's defeat in the House of Lords yesterday on the extension of compulsory sales, will the Secretary of State confirm his intention to withdraw that Bill?

Sir George Young: No, Sir. The hon. Lady seems to think that if a local authority house is sold it somehow disappears from face of the earth—

Mrs. Taylor: From the rented sector.

Sir George Young: —but it is still there to meet housing need and the resources provided by the sale can be used by the local authority to complement its housing programme.

Operation Groundwork

Mr. Trippier: asked the Secretary of State for the Environment what progress is being made with operation Groundwork.

Mr. King: The Countryside Commission tells me that good progress is being made in each of the five new areas selected towards establishing Groundwork trusts and agreeing early action programmes.

Mr. Trippier: I thank my right hon. Friend for implementing operation Groundwork in my constituency. It will certainly improve the environment and create more jobs. Does he intend to extend the system nationally?

Mr. King: We have allocated funds to extend the original project from St. Helens to five other areas, including that of my hon. Friend. I am grateful for the interest that my hon. Friend has shown in this very imaginative programme. As it is fairly demanding of resources, I should like to see how these developments progress and then review the matter further.

Repair Grants

Mr. Latham: asked the Secretary of State for the Environment whether he will make a statement on the response so far to the 90 per cent., temporary level of repair grant introduced in 1982.

Mr. Stanley: The response to the Government's initiative on repair grants has been exceptionally encouraging. The number of repair grants paid in England in 1979 was 345. Following the legislative changes in the Housing Act 1980 and the introduction of 90 per cent. repair grants in the 1982 Budget, the number of repair grants paid last year was 33,715.

Mr. Latham: I should first declare an interest, because a Labour council has awarded me such a grant. May I congratulate my hon. Friend on progress in this direction, as it is without doubt the speediest and most effective way to deal with urban decay?

Mr. Stanley: I am grateful to my hon. Friend. I hope that all local authorities will continue to give the most favourable consideration to the use of their discretionary powers in relation to repair grants while the Government's unrivalled generosity in respect of 90 per cent. repair grants is still on offer.

Mr. Frank Allaun: Why do local authorities receive only 75 per cent. in similar grants? Should not they, too, receive 90 per cent.?

Mr. Stanley: We felt that it was right to concentrate on the priority areas of home improvement — intermediate grants for the installation of basic amenities such as inside baths and WCs and repair grants—because the recent English house condition survey showed this to be the priority area of attack in home improvements.

Mr. Cartwright: Is the Minister aware that there is public concern in some areas about increasing delays by local authorities in processing applications for improvement grants? What steps is he taking to deal with that problem?

Mr. Stanley: I am aware that there have been some complaints on that score. This reflects in part the great upsurge in repair grants and home improvement activity that the Government have helped to generate. Local authorities did well in the last financial year, more than doubling the output on home improvement grants in 12 months. I recognise that there is a considerable burden of work, but most local authorities are deploying existing staff to that work.

Water Authority Chairmen

Mr. Ford: asked the Secretary of State for the Environment if he will list the salaries and conditions of water authority chairmen in England.

Mr. Giles Shaw: Regional water authority chairmen's current salaries range from £13,679 to £24,980. With permission, I shall circulate the details in the Official Report.
The conditions of appointment, which are uniform for all water authority chairmen, were given in a written reply to the hon. Gentleman on 15 April.

Mr. Ford: I thank the hon. Gentleman for that answer. Does he recall that in his reply of 15 April he stated that

the notional full-time pay of the chairman of the Yorkshire water authority was more than £29,000 pensionable income, plus perks? Is he aware that that is comparable with the salary offered to the new chief constable of west Yorkshire, whose duties are far more onerous? How does he justify that figure?

Mr. Shaw: The notional annual salary is a full-time figure. The actual appointment for Yorkshire is for three days per week, so the pay taken is substantially less than the figure to which the hon. Gentleman referred. As for comparibility with other public service posts, such as that of chief constable, that is hardly a matter for me. I should point out, however, that the Yorkshire water authority provides a vital service to a region far larger than that presided over by the chief constable of west Yorkshire.

Mr. Arthur Lewis: I thank the Minister for his original reply. If he can give that information, why can he not give the salaries of the chief executives? Information is available on the salaries of all the lower-paid workers in water authorities, so why should not Members of Parliament know the salaries of the chief executives? Will the Minister find out and tell the House or write to me?

Mr. Shaw: The hon. Gentleman will be aware that the terms and conditions of appointment of chief executives are a matter for the authorities and not for my right hon. Friend the Secretary of State. He will also be aware that the information is given in the annual report of every water authority, which is laid before the House.

Following are the details:


Regional water authority and Chairmen
Salaries and basis of appointment


North-West: Mr. George Mann
part-time; four days a week, salary £24,980 (notional full-time rate £31,225).


Severn-Trent: Sir William Dugdale Bt


Thames: Mr. Geoffrey Edwards


Anglian: Mr. Bernard Henderson
part-time; three and a half days a week, salary £20,504 (notional full-time rate £29,291).


Southern: Sir Arthur Godfrey Taylor J


Yorkshire: Mr. Peter Coverdale
part-time; three days a week, salary £17,575 (notional full-time rate £29,291).


South-West: Mr. Len Hill
part-time; three and a half days a week, salary £19,150 (notional full-time rate £27,358).


Northumbrian: Mr. Michael Straker
part-time; two and a half days a week, salary £13,679 (notional full-time rate £27,358).


Wessex: Mr. Malcolm Anson

Greater London Council

Mr. Eggar: asked the Secretary of State for the Environment if he will introduce legislation to abolish the Greater London council.

Mr. King: I have at present no plans to legislate for abolition. The need for the Greater London council in its present form is a matter that I keep under review as part of my overall concern with securing an economical and cost-effective framework for local government.

Mr. Eggar: Is my right hon. Friend aware that Mr. Ken Livingstone has two achievements to his credit? First, he is slightly less unpopular than the Leader of the


Opposition. Secondly, he has made Londoners aware of the GLC. Now that Londoners are aware of the GLC they want it abolished. When will my right hon. Friend do that?

Mr. King: My hon. Friend seems to be quoting the poll in today's Standard, in which Mr. Livingstone is identified by Londoners as an even greater misfortune for the capital than the Labour-controlled GLC that he leads. As my hon. Friend rightly points out, however, all things are relative and Mr. Livingstone still manages to achieve a higher score than the Leader of the Opposition.

Mr. George Cunningham: Is the Secretary of State aware that some Labour-controlled authorities in London are still keen to use public funds to finance a Labour local authority association? Is he aware that, having been advised that it is not legal to do that explicitly, they are now building conditions into the constitution of the new association about, for example, the abolition or not of the GLC so as to ensure that only Labour authorities are likely to join the association? Will he look carefully at the proposed constitution of the association and take whatever steps are necessary to prevent Labour authorities from stealing public funds for Labour party purposes?

Mr. King: The hon. Gentleman will be aware that that is not principally a matter for me. In the first instance, it is a matter for the ratepayers of the borough, who can make representations to the district auditor if they think that there is improper use of public funds. That is the long-hallowed responsibility of the district auditor. I am aware, however, that enterprises are now being undertaken by local authorities that are a total abuse of what local authorities in the past would have considered to be the proper use of their funds. This raises very serious issues and, as I said yesterday, I am considering the matter.

Mr. Jay: Has the Secretary of State any proposals for the abolition of the constituency of Enfield, North?

Mr. King: No, Sir.

Mr. Squire: Despite the undoubted horrors perpetrated by Mr. Livingstone, will my right hon. Friend consider carefully before acting on the lines advocated by my hon. Friend the Member for Enfield, North (Mr. Eggar), not least because a number of regional functions will remain that cannot be devolved to local authorities? Is he aware that, faced with the choice between an elected authority or a non-elected quango, or arm of central Government, many of us prefer on balance to retain an elected regional authority?

Mr. King: I understand my hon. Friend's point. He will have noticed from my reply that, although I understand the irritations that Mr. Livingstone can cause, the burden that he is placing on London and the number of jobs that have been lost in London as a result of his and his colleagues' activities, my overall concern is to secure an economical and cost-effective framework for local government.

Mr. Graham: Before considering again the abolition of the GLC, will the Secretary of State reflect on the fact that Londoners have substantially endorsed the GLC's policies on transport and job creation?

Mr. Eggar: Read the survey.

Mr. Graham: If the hon. Member for Enfield, North (Mr. Eggar) is so anxious about performance in local

government, would he not be better employed using his time trying to improve the disgraceful level of services that are given to his and my constituents by the Tory-controlled London borough of Enfield?

Mr. King: I am surprised that the hon. Gentleman is acting as an apologist for Mr. Livingstone and some of the activities of members of the GLC. He knows that some of their activities bring great discredit on the standards and tradition of local authorities, and many of the members of his party know it, too.

Football Authorities (Discussions)

Mr. Canavan: asked the Secretary of State for the Environment what subjects he expects to discuss at his next meeting with the football authorities.

Mr. Macfarlane: I have a regular dialogue with the football authorities, covering in particular the initiatives being taken domestically and in Europe to prevent and control crowd violence at matches.

Mr. Canavan: To make up for the discriminatory ban against Scottish football fans, which was tried at Wembley two years ago, will the Minister ask the Football Association to ensure a fairer allocation of tickets this year so that as many Scottish fans as possible can go to Wembley to watch their team beat England, especially as recent improvements in the behaviour of Scottish football fans have been so great that many of them have set a good example to some of the hooligan elements south of the border?

Mr. Macfarlane: I am sure that the authorities in the Football Associations in both England and Scotland will note what the hon. Gentleman has said.

Mr. Ogden: When the Minister meets the football authorities, will he not spend too much time on the televising issue but encourage those who want to go and watch football matches at football stadiums to do so rather than go elsewhere?

Mr. Macfarlane: That seems to go right to the heart of the matter, namely, whether the British public believe that the quality of product on display at professional football grounds is one on which they want to spend their money.

Mr. Budgen: When my hon. Friend next meets the football authorities, will he take the opportunity to outline his important new responsibilities in respect of children's play?

Mr. Macfarlane: I shall undertake to do that if my hon. Friend will approach the representatives of Wolverhampton Wanderers football club.

Solid Fuel

Mr. Skinner: asked the Secretary of State for the Environment whether he will issue a further circular to all local authorities giving advice on the case for using solid fuel and for the inclusion of chimneys in all building schemes; and if he will make a statement.

Sir George Young: No, Sir. The choice of heating fuels and whether to include a flue in newly contructed local authority housing is a matter for each housing authority in the light of its knowledge of local needs and circumstances—particularly of tenants' preferences.

Mr. Skinner: Will the Minister confirm that, during the past 12 months, there has been a significant increase in the number of people who have transferred to solid fuel? Does he agree that one of the problems that people often face when installing new appliances is that they are unable to burn solid fuel because of the misguided policy of local authorities not to build chimneys? As there are 50 million tonnes of coal on the ground, some of which can be used for domestic purposes, and since there is a 300 years' supply of coal underground and a limited supply of other fossil fuels, why does he not review his decision and encourage local authorities to take the action that I have suggested?

Sir George Young: I am sure that local authorities are as aware of the facts that the hon. Gentleman has mentioned as he is. We have produced a domestic energy note that has drawn the attention of housing authorities to the possibility of including flues in new dwellings or designing new dwellings so that flues can be incorporated later. Ultimately, however, it is for local authorities to decide what needs to meet.

Mr. Les Huckfield: Will the hon. Gentleman now advise local authorities on the installation of certain types of double glazing, in council and other dwellings so that tragedies such as we suffered in Nuneaton yesterday, and that occur elsewhere, can be avoided?

Sir George Young: I am not sure how that issue arises from a circular on solid fuel. Perhaps it would be best if I wrote to the hon. Gentleman on the matter.

General Rate Fund

Mr. Dobson: asked the Secretary of State for the Environment how many local housing authorities have budgeted to transfer money from their housing revenue accounts to their general rate fund in 1983–84.

Mr. Stanley: This information is not yet available.

Mr. Dobson: Does the Minister agree that it is grossly inequitable to transfer funds from council tenants to the general body of ratepayers when the average income of council tenants is lower than that of owner-occupiers?

Mr. Stanley: I do not agree. The House debated the subject at great length in 1980. If one examines the relative incomes of different tenure groups, one finds, for example, that the average income of tenants who rent in the private sector are somewhat lower than the income of those who rent in the public sector, yet the former are ratepayers. We give councillors discretion about making transfers from the general rate fund to the housing revenue account and the House has taken the view that we can give them the same discretion to make a reverse transfer if they believe it is reasonable to do so.

Mr. Campbell-Savours: Now that it has been proved that many councils are making extortionate profits out of their council tenants and are transferring those profits to the general rate fund, will the Minister go to the Prime Minister, after her stupid comment in the House yesterday that council tenants throughout the country are being subsidised, and ask her to withdraw her statement and show some sensitivity towards people on low incomes, who invariably have to live in council accommodation?

Mr. Stanley: The hon. Gentleman should have regard to what I have just said and consider the scale of the

transfer in the reverse direction. He may be interested to know that transfers from the housing revenue account to the general rate fund last year totalled some £21 million, whereas transfers from the general rate fund to the housing revenue account totalled £443 million.

Mr. Kaufman: Is it not a fact that, this year, the Government have planned for £2,500 million in tax relief for people who are buying their houses on a mortgage, while housing subsidies have been reduced to £370 million. Is it not also the case that not only do council house tenants pay rent, which has increased by 134 per cent. under this Government, but they pay rates like everyone else? Therefore, is it not intolerable for the Government to force council house tenants to subsidise the rates of people whose incomes are 20 per cent. higher than theirs?

Mr. Stanley: I am delighted to hear of the right hon. Gentleman's anxiety about council tenants as ratepayers. That is not exhibited by the level of rates levied by many Labour authorities. As to assistance for council tenants, I remind the right hon. Gentleman that more than half of all local authority tenants receive subtantial help with their rents through the rent rebate and supplementary benefit systems.

Sheffield

Mr. Hooley: asked the Secretary of State for the Environment what request was made by Sheffield for housing investment programme expenditure for 1983–84; and what amount was authorised.

Mr. Stanley: Sheffield's HIP bid for 1983–84 was for £67·4 million and its allocation was £25·2 million.

Mr. Hooley: Is that not typical of the position over the past three years? Is the Minister aware that Sheffield has persistently asked for money, which it is well capable of spending, to maintain an adequate housing programme, but that the money has been denied by the Government?

Mr. Stanley: The hon. Gentleman says that Sheffield is well capable of spending the funds. It looks as though Sheffield might end up with an underspend this year. I have enourmous doubts about whether Sheffield is remotely likely to be able to spend the sum for which it bid, as it is more than twice as much as it has ever spent in one financial year.

Mr. Flannery: Is it not a fact that Sheffield is being deliberately victimised by the Tory Government because of the success of its transport policy? Does the Minister agree that that victimisation has continued for several years, because the Tory Government are appalled at the success of that policy, and that every year more and more people vote Labour because of it?

Mr. Stanley: The only evidence of victimisation that I see in Sheffield is of the many council tenants who have tried to buy their houses.

Mr. Flannery: At half price.

Mr. Stanley: The local authority there puts every possible difficulty in their way.

Rate Support Grant

Mr. Wrigglesworth: asked the Secretary of State for the Environment what has been the percentage


reduction in real terms since 1979 of the rate support grant for the inner city partnership and programme authorities and designated districts.

Mr. Giles Shaw: I refer the hon. Gentleman to the answer I gave to the right hon. Member for Crosby (Mrs. Williams) on 24 February.

Mr. Wrigglesworth: Will the Minister explain the criteria by which decisions on this matter are reached? Is he aware that Stockton borough council applied for a grant under those programmes, but was turned down despite the fact that Stockton suffers from the same deprivation and difficulties as the other authorities that have received grants under the programme?

Mr. Shaw: I fully understand the hon. Gentleman's concern for his constituents. My right hon. Friend the Secretary of State saw members of Stockton council a few weeks ago, and I am sure that the matter was discussed then.

Metropolitan Green Belt Sites

Mr. Dykes: asked the Secretary of State for the Environment what recent representations he has received from the National House Builders Federation concerning proposals for building on Metropolitan green belt sites in and around Greater London.

Mr. Giles Shaw: Representations have been received from the House Builders Federation that a number of sites included in the London green belt should be released for building. I shall send my hon. Friend a copy of my reply.

Mr. Dykes: In the meantime, can my hon. Friend confirm the Government's attitude towards the suggestions in the federation's comments that the green belt is sacrosanct? Does he agree that it is much more important to redevelop inner city sites in London, including the docklands, for housing?

Mr. Shaw: I endorse my hon. Friend's view that many inner city sites in London, especially the docklands, must be redeveloped as soon as possible. I take note of the federation's views, which are continually discussed by myself and my right hon. Friend.

Cable Television

The Secretary of State for the Home Department (Mr. William Whitelaw): With permission, Mr. Speaker, I shall make a statement on the Government's White Paper on the development of cable systems and services, which is published today in the name of myself and my right hon. Friend the Secretary of State for Industry. Copies are available in the Vote Office.
The White Paper, as the subject requires, is a long and complex document with nearly 250 paragraphs. The House will need time to study it and to form its views on it. Subject to arrangements to be made by my right hon. Friend the Leader of the House, there will be an early opportunity for a full debate. Meanwhile, I hope that it will assist the House if in this statement I draw attention to the main cable issues — the regulation of programme services and the safeguarding of public service broadcasting — that were still unresolved when we debated the Hunt report on 2 December 1982.
The White Paper sets out a plan of action for future cable development. Central to this plan is the creation of a new statutory cable authority. Work is starting on the preparation of a Bill to be introduced at the earliest practicable date. The cable authority will have two main roles — to award franchise to cable operators for the provision of cable services, and to exercise supervision over those services in the manner which the White Paper describes in detail.
I wish to stress five particular aspects. First, on pay-per-view, the Government have decided not to follow the Hunt report in excluding this method of financing cable services. Cable operators have made it clear that they attach much importance to it, and we believe that over a wide area, pay-per-view can be allowed without damage to BBC and ITV services and the many viewers who rely and who will continue to rely on them. To protect the interests of those viewers, the cable authority will have the duty to exclude from pay-per-view events customarily covered by BBC or ITV.
Secondly, that restriction is in addition to the ban which, adopting the Hunt recommendation, we propose on the acquisition by cable of exclusive rights for the great national sporting events, such as the cup final.
Thirdly, on advertising, we follow the Hunt report in proposing that the cable authority should adopt an advertising code which in essential particulars would follow the existing IBA code. Arrangements for clearing the copy of advertisements would follow broadly the pattern for those on independent broadcasting. On the amount of advertising, we depart from Hunt in preferring to limit advertising on cable, on channels broadly comparable to ITV, to the amount allowed on ITV, which is currently six minutes an hour on average. Channels wholly or mainly devoted to classified or other advertising will, however, be allowed, and those limits will not apply then.
Fourthly, on foreign programme material, we intend that there should be from the outset more stringent obligations than Hunt proposed on the use of British programme material. The cable authority will be required to see that a "proper proportion" is shown on each channel as appropriate, to work towards a progressive increase in that proportion as United Kingdom production capacity

grows, and to report progress regularly to the Government. We are anxious to maintain and develop the strong national production capacity that the BBC and ITV have helped to create.
Fifthly, the Government are anxious that the cable authority should ensure high standards of cable programme services. The same rules regarding good taste and decency as apply to BBC and IBA programmes will apply to all cable channels. There will be no exception for channels with electronic locks. As the White Paper says, so-called adult channels have no place on the cable systems which the Government wish to see develop.
Finally, in the period before the legislation is enacted, we are anxious to maintain and to continue the momentum for cable development, through two interim arrangements. First, the Government will be prepared, under existing powers, to authorise a limited number of new cable systems— not more than 12—as pilot projects, each covering a maximum of about 100,000 homes. Projects will be chosen for offering a positive contribution to advanced technology, a comprehensive range of programme services and a capability of interactive services. Secondly, we propose to allow cable relay operators to offer new programme services over their existing systems for a transitional period. Where necessary, the obligation to relay BBC and ITV services on the cable will be dropped, provided that operators offer their customers alternative means of reception at no extra cost. No application under either of those interim arrangements will be entertained until Parliament has debated and approved the White Paper.
The Government believe that the White Paper offers an acceptable and well-balanced set of proposals. They will give cable an excellent opportunity for development, with the stimulus that this will provide for advanced technology. At the same time they will protect public broadcasting services and those who rely on them. I commend them to the House.

Mr. Roy Hattersley: First, I thank the Home Secretary for making that statement today. We are most grateful that he eventually accepted our view that the national importance of the subject required him to report to the House rather than simply to rely on a press conference outside the House.
Is the Home Secretary aware that the Opposition regard cable television as potentially of great benefit to the nation as long as it is properly supervised and controlled, but that we fear that the proposals in the White Paper—indeed, the entire philosophy of the Government—will result in a system that meets the needs more of private profit than of the public interest? It remains our conviction that a satisfactory system meeting both present and future needs must be based on a national common carrier, and that that common carrier must be British Telecommunications.
In the light of that overriding principle, I ask the Home Secretary some specific questions on his statement. If pay-per-view is to be introduced, how, despite his bland assurances, will the interests of viewers outside the pay-per-view areas be maintained? Is it not a fact that the most popular programmes and the most recent films, as distinct from one or two national sporting events, will be bought by the pay-per-view areas and will not be available for transmission in the rest of the country?
Secondly, the Opposition welcome the controls on advertising in the cable sector, but what does the Home


Secretary mean by standards of programme content which broadly follow those presently required by the IBA? Can we be assured that "broadly comparable" does not mean a lowering of standards, and that the present standards of advertising will at least be maintained?
Thirdly—this is perhaps a highly topical issue—is there sufficient advertising to go round, or will the introduction of the new channels imperil independent broadcasting by the programme companies because of a lack of sufficient advertising to sustain all the available channels?
Fourthly, does the right hon. Gentleman accept—I am sure that he does—that we welcome the limit to be placed on the broadcasting of foreign material? However, will he tell us what a "proper proportion" of home-produced material means? The Opposition regard a "proper proportion" as no less than the proportion that is now required of the independent companies. Will he give us an absolute assurance that the cable companies will not be allowed to project a larger proportion of foreign matter than that which is now available to the IBA's individual areas?
Is the right hon. Gentleman aware that we very much welcome the rejection of the unsavoury notion of the adult channel? It never struck me that he would approve of such a proposition. I am delighted that our judgment of his character has been confirmed. Perhaps other doubts about his character will be justified later.
But what is all the rush about? Why cannot we have the legislation that the right hon. Gentleman promised the House on 2 December 1982? How does he reconcile parts of the White Paper's paragraphs with his absolute assurance on that date that material progress would not come about until the House had had the opportunity to vote on a Bill dealing with these matters? Why are the Government in such an unseemly rush to create two television nations—one which can enjoy cable television and another, comprising the majority of the nation, which will not be offered that benefit?

Mr. Whitelaw: I am glad to learn from the right hon. Gentleman that we are at one on the objective of what we should achieve through cable television and its benefits for advanced technology. He questioned in a number of ways whether the way that we have proposed to go towards that objective is the right one. First, he suggested that British Telecom should have a monopoly. My right hon. Friend the Secretary of State for Industry and I believe that it should have a substantial share but not an exclusive monopoly.
The safeguards that we have proposed for pay-per-view are reasonable; it took a lot for me to accept that, as I come from an area that is not likely to have cable in my lifetime, and I am unlikely to wish to live there for the rest of my life without ever being able to see some of the things that I see now. I believe pay-per-view to be a perfectly reasonable concept.
The controls on advertising will be the same and we wish them to be so. I can give that assurance.
In the long run it must be for the cable authority to decide exactly what proportion of foreign material there should be. It is important to note that the cable authority has an extra duty imposed on it in the White Paper above that presently carried by the IBA. It will have to show that

there will be a progressive reduction in the amount of foreign material that is used. That duty is not placed on the IBA but it would be placed on the cable authority.

Mr. Dennis Skinner: Keep out the foreign muck.

Mr. Whitelaw: I think that our decision on adult channels is right. I am interested in the views of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) on my character. Many people have had views on my character, usually in contradictory directions.
I do not accept the right hon. Gentleman's remarks about a rush. When the White Paper has been approved by Parliament, as I believe it will be, I think that it will be reasonable for the Secretary of State for Industry and me to use our powers under existing legislation. It is important to maintain the momentum if Britain is to keep its lead in advanced technology.

Several Hon. Members: rose—

Mr. Speaker: Order. I remind the House that the statement says that there will be an early opportunity for a full debate. I propose to allow questions to continue until 4 o'clock, when we shall move on to a further statement. The House is questioning the statement and not debating it.

Sir Paul Bryan: Is my right hon. Friend aware that the House will appreciate his success in achieving a balance between maintaining the standards on which we put so much value and giving sufficient freedom to the system to attract the capital that will be necessary to establish this important industry?
Is my right hon. Friend aware of the critical importance of the first dozen pilot schemes getting off to a good financial start? Will he confirm that the pilot schemes will have the availability of pay-per-view, which is a way of getting early revenue?

Mr. Whitelaw: I am grateful to my hon. Friend for his remarks about balance. That is exactly what we have sought to achieve, and I think that he is right in believing that we have achieved a balance. I accept the critical importance of a good financial start for the pilot projects, and they would have access to the pay-per-view system.

Rev. Martin Smyth: My colleagues and I appreciate the general statement and welcome it, especially the decision on so-called adult channels. In seeking to protect the interests of viewers, will the cable authority have a duty to exclude party political broadcasts from pay-per-view events? Will the right hon. Gentleman use his undoubted influence to raise the standard of such performances, especially after last night's appalling production?

Mr. Whitelaw: I am grateful to the hon. Gentleman for his remarks, especially those about adult channels. I think that it will be wise for me on this occasion not to be drawn into comments on party political broadcasts.

Sir Philip Goodhart: How will foreign programme material be defined? For example, the film "Gandhi" received massive financial support from the Indian Government and none from the British Government. Is it an Indian film or a British film?

Mr. Whitelaw: That must be a matter for the cable authority to decide in the course of time.

Mr. Clement Freud: The House will be cautious in encouraging new television schemes after Channel 4 and TV-am, but will the right hon. Gentleman accept that my right hon. and hon. Friends encourage the manner in which the White Paper is constructed and the way that he is moving away from the original Hunt report?
I shall ask the right hon. Gentleman three questions. [HON. MEMBERS: "No".] First, which Government Department will be in charge? If it is to be the Home Office, will he think again? Secondly, will he consider advertising and the natural break concept? Thirdly, will he produce a schedule? The reference to
great national sporting events, such as the cup final
is far too vague. The entire nation will want to know which events will be restricted.

Mr. Skinner: The hon. Gentleman is the Home Secretary-designate.

Mr. Whitelaw: I am grateful to the hon. Member for Isle of Ely (Mr. Freud) for what he has said. Responsibilities will be shared by my right hon. Friend the Secretary of State for Industry and myself. As the Home Office has taken the lead in publishing the White Paper, the Home Office—it has, of course, responsibilities for broadcasting — will take the lead in broadcasting matters. I note what the hon. Gentleman has said about advertising and I do not think that I have anything further to add. In the long run, it will be for the cable authority to come to a decision on a schedule. Having had discussions with various people, I recognise that it will be an extremely difficult issue, which will require considerable discussions and negotiations with all concerned, including broadcasters and sporting bodies.

Mr. Tim Rathbone: Will my right hon. Friend accept that we on the Conservative Benches find nothing bland about his statement and, in the first flush of reading it, nothing bland about the White Paper, which is excellent?
Does my right hon. Friend accept that the principle is accepted that enterprising private operators, after a period of testing, are more likely to meet the developing desires of people for cable television than any Government or Government authority?
Will the Home Secretary reconsider the maximum limit of 100,000 homes for the test areas, because, like my hon. Friend the Member for Howden (Sir P. Bryan), I have some doubt that the areas are completely viable for carrying out such tests?

Mr. Whitelaw: I am grateful for what my hon. Friend has said. The success or otherwise of cable television depends on those who decide to come forward, the money they have and their success when they come forward and on whether the public will pay to be connected to cable. Those are matters that the House cannot now determine.
As to the limit of 100,000 homes, the Government are anxious at this stage to have pilot projects and nothing beyond that, to proceed with advanced technology and to understand some of the problems, but not to pre-empt a Bill that will eventually pass through the House.

Mr. John McWilliam: Will the Home Secretary tell the House what representations were made to him by Mercury in relation to cream-skimming and high-density data service areas? Why did the Home

Secretary and his right hon. Friends refuse to accept similar representations when they were made generally for telecommunications?

Mr. Whitelaw: I understand from my right hon. Friend the Secretary of State for Industry, to whom such representations would be made, that consultations have taken place and that he believes that he has gone a long way to meeting some of the points put forward.

Sir Geoffrey Johnson Smith: I congratulate my right hon. Friend and his hon. Friend the Minister for Industry and Information Technology on the statement and on the White Paper. Assuming that the House approves the White Paper, when does my right hon. Friend expect to grant the first extension of licences?

Mr. Whitelaw: I would not wish to commit myself at the moment. That depends on many factors.

Mr. John Golding: Is the right hon. Gentleman aware that the Post Office Engineering Union believes that cable should not be developed separately and that it will be better for the country to have a single integrated telecommunications network covering television, radio, data and telecommunications, and that the best body to do that is BT, which has the necessary skills, knowledge and physical assets?

Mr. Whitelaw: I have nothing further to tell the hon. Gentleman, whose interests I fully understand. British Telecommunications should have a substantial share, but the Government have decided that it should not be exclusive.

Mr. John Spence: I congratulate my right hon. Friend on the White Paper and draw his attention and that of the Minister for Industry and Information Technology to the main thrust of a national telecommunications structure. Is the introduction of 12 pilot projects the best way of giving impetus to that thrust? Should the Government not be thinking more seriously in terms of greater impetus than simply providing for 12 projects covering 100,000 homes?

Mr. Whitelaw: The reasoning behind the 12 projects and the limited nature of the development is the belief, which I strongly share, that while it is right to keep the momentum going, it would be wrong to pre-empt a decision on a Bill in the House.

Mr. Ian Wrigglesworth: Why do not the Government recognise the value of competing technologies more than they do in the White Paper? Will they consider the possibilities existing in other spheres for providing services of this type and try to develop a comprehensive communications network — something which is not apparent in the White Paper? What are the implications for the British Broadcasting Corporation? What is the Central Policy Review Staff doing about the BBC? Many hon. Members will have read recently in the newspapers about the dismemberment or abolition of the BBC, which is a great asset to this country.

Mr. Whitelaw: I suggest that the hon. Gentleman does not believe everything he reads. The White Paper makes clear the future position of the BBC, by which I stand absolutely and completely.

Mr. Tim Brinton: Will my right hon. Friend, bearing in mind the large amount of money which


will have to be invested in these pilot projects, tell the House whether he is satisfied that, with the limitation of 100,000 homes and limitations on advertising, these pilot schemes will be able to break even, let alone make a profit?

Mr. Whitelaw: My right hon. Friend the Secretary of State for Industry and I have discussed this matter. We believe that, with some of the existing operators, who are presently licensed and with whom the Government can go further, and with the pilot projects, the Government are making a modest start. If we made more than a modest start we would run straight into pre-empting legislation —something I feel strongly about.

Mr. Robert Hughes: Will the right hon. Gentleman explain paragraph 247 of the White Paper, which suggests that, immediately this White Paper is debated and approved, existing companies will be given licences to 1986 to offer additional services? How does that square with competition? Does it not give those companies a head start?

Mr. Whitelaw: No. On the principles on which they are licensed by the Home Office, it does not give the companies a head start. It was thought reasonable to give them a chance to develop in the same way as the pilot projects.

Mr. Peter Fry: I applaud my right hon. Friend's White Paper, but is he aware that there is anxiety because in many urban areas the state of the highways, due to the efforts of public undertakings, are in an unsatisfactory condition? The onset of cable television will cause further problems. Will he ensure that the cost of reinstating the highways to the satisfaction of the highway authorities does not fall on the ratepayers or taxpayers but will be met by those who benefit by supplying cable television?

Mr. Whitelaw: I shall confine myself to reminding my hon. Friend that a code on this point is attached to the Telecommunications Bill, which is now passing through the House. There have been consultations on this matter, and they will continue.

Mr. Skinner: Is the Home Secretary aware that leaving a substantial number of television channels to the whims of market forces and allowing the lowest common denominator to apply will breed violence and materialism, resulting in a further weakening of the social fabric? As a result, those who have to pick up the debris, such as probation officers, among others, will have more problems to deal with. Does not the Home Secretary's statement show that the Government give more priority to those making money out of television than to probation officers, whose junior members may face a cut of £1,000 per annum?

Mr. Whitelaw: I shall confine myself to the matter in hand. I hope that the hon. Gentleman recognises that there are great advantages for the earning capacity of this country — from which many people are paid — in developing advanced technology and taking advantage of Britain's promising position in this sphere. If the hon. Gentleman does not believe that, he is even more of a Luddite than I thought he was.

Mr. Gary Waller: Will my right hon. Friend bear in mind that some of the most exciting developments in cable relate not to television but to the interactive services to which he referred in his statement? As there is much uncertainty in television, with breakfast television and Channel 4, there must, inevitably, be much uncertainty as to the future of cable television. Will my right hon. Friend ensure that those uncertainties do not act as a barrier to the development of the interactive services, which hold out great hope for the future?

Mr. Whitelaw: I think that the development of cable and the pilot projects are closely connected with the development of the interactive services, which are enormously important.

Mr. Austin Mitchell: Although the Home Secretary has modified the race into cable from a headlong rush to a moderate amble, is there not still a danger that large parts of the country will be lumbered with coaxial cable and with a tree-and-branch system that will quickly become outdated and could well leave Britain behind other countries which go wholeheartedly for fibre optics?

Mr. Whitelaw: The hon. Gentleman knows that there are particular incentives in the length of the franchise, in favour of companies going for the star system, which we recognise is the best system for the future.

Mr. Jonathan Aitken: rose—

Mr. Skinner: Good morning.

Mr. Aitken: In view of the concern expressed by the Opposition about profits being made out of cable television, will my right hon. Friend give careful consideration to the argument that these cable franchises, like some others I could think of, may well turn out to be licences to lose money? Is my right hon. Friend prepared to reconsider the point that the figure of 100,000 viewers per station may turn out to be woefully inadequate and that, given the experience of cable television in America, the cable authority must ensure, to reserve jobs and livelihoods in the industry, that the finances of any cable operator are very solid and cautious?

Mr. Whitelaw: Many people see a future in cable and want to go into it, but they risk their own money. In our society, that is perfectly proper in every way. It is right that they should have the opportunity. In addition, we should show that we can make a success of cable in this country, with the right balance. We produced the White Paper against that background.

Citizens Advice Bureaux

The Minister for Consumer Affairs (Dr. Gerard Vaughan): With permission, Mr. Speaker, I shall make a statement on the review of the National Association of Citizens Advice Bureaux. In the Adjournment debate last week I said that I would make an announcement to the House on the details of the review as soon as I could. I am glad to say that I can now announce the chairman and terms of reference of the review, which the association and I have agreed is urgently needed.
The terms of reference will be:
To review the functioning of the National Association of Citizens Advice Bureaux and to make recommendations, with a view to ensuring that the Association gives the best possible service and support to local citizens advice bureaux; and that the monies available to the Association are spent in the most effective way.
The review will be chaired by Sir Douglas Lovelock. A firm of management consultants will be appointed to assist in its work.

Mr. Dennis Skinner: Is he a multilateralist?

Dr. Vaughan: A senior partner of the firm chosen will also be a member of the review team. I propose that a third member should be appointed and I hope to announce the name shortly.

Mr. Skinner: I bet he has been checked out.

Dr. Vaughan: The terms of reference and the membership that I have announced have been agreed with the national association.
I have asked the chairman to report to me in the next six months. The review team will, of course, work closely with the national association; and the report will be made available to it once I have received it. I propose that the report should be published.
The management consultants assisting the review team will examine the staffing and management structure of the national association and will be asked to complete their work within the next three months. In accordance with normal practice, we shall be seeking tenders at once for this job on the basis of a shortlist to be discussed with Sir Douglas Lovelock and the national association.
I am very glad to say that complete agreement has been reached with the national association that the review should be carried forward on this basis, and I am sure that that will be welcomed by the whole House. In the light of this, and my helpful discussions with the national association's officers, I can confirm that Government funding for NACAB for the whole of the current financial year—[HoN. MEMBERS: "Ah!"]—will be maintained on the normal basis.

Mr. Peter Archer: The whole House will welcome that assurance to the National Association of Citizens Advice Bureaux that at least it may proceed to budget on a proper basis and not on the hand-to-mouth basis that the Minister originally proposed. Does the Minister appreciate that no one would dispute that a body receiving public money should submit to a review of how that money is spent? Is he aware that the national association would welcome such a review?
The House will note with pleasure that the inquiry into staffing and efficiency is not intended to deal with the

allegations of improper political activities, which emanated from his Department, but is it not the case that, however the allegations originated, the Minister has still not said clearly and unambiguously that they are without foundation? After three previous invitations, may I call upon him to do so now? When does the Minister propose to reply to the letter that I wrote to him on 12 April, inviting him to acknowledge the damage that has been done to the relations of some local citizens advice bureaux with their local authorities, on which they depend for finance, and to circularise local authorities urging them to continue funding citizens advice bureaux in the vital work that they are doing, at least to the same level as before?
If, as the Minister has just said, he is anxious that local citizens advice bureaux should receive
the best possible service and support",
is the answer to my letter that he will send that circular to local authorities, or that he will not?

Dr. Vaughan: I am glad about the first part of the right hon. and learned Gentleman's remarks and about the welcome that he has given to the statement. I also welcome his supportive remarks, which are contrary to many of the comments that have been made, which undermine local bureaux—[AN HON. MEMBER: "That is a bit rich."] As to the various allegations, I have said several times that when complaints are put to me it would be quite improper not to pass on the general nature of what was said. I have announced clear terms of reference for the review, which speak for themselves. It is not for me to comment further on its scope, which, within the terms of reference, is a matter for the independent review team to determine. I made it clear in my statement and in the Adjournment debate that I expected local authorities to continue to support the local bureaux. On Friday, I gave an undertaking that I would consider the possibility of a circular to back that up.

Mr. Richard Wainwriight: As the Minister has frequently stressed to the House that the Government grant is for NACAB and NACAB only, will he now confirm that the review body will have no authority to make any judgments—incidentally or otherwise—on the work of the local bureaux?

Dr. Vaughan: The review body is to examine the functioning of the national body exactly in accordance with the terms of reference that I set out in the statement.

Mr. Ivan Lawrence: Is my hon. Friend aware that the achieving of agreement represents a signal success and will be welcomed by everyone? Is he also aware that the closing of DHSS caller offices, now that the benefits are no longer paid out, still leaves them providing a service by advising elderly people on how to fill in forms? Would not that service be performed better by the citizens advice bureaux? Will my hon. Friend bear that in mind when he considers future allocations of resources to CABs?

Dr. Vaughan: My hon. and learned Friend's remarks go rather wider than the statement, but I shall certainly bear them in mind.

Mr. J. W. Rooker: Will the Minister confirm that his statement has nothing to do with the highly critical report on DHSS local offices that was sent to the DHSS in December 1981 by NACAB and which drew attention to massive shortfalls in departmental services to the citizens of this country, as a result of which NACAB was having to pick up the pieces?
In relation to the question asked by the hon. Member for Colne Valley (Mr. Wainwright) about the terms of reference, will the Minister confirm that the review body can look at NACAB in conjunction with its services to local CABs? Is the Minister aware of the effect that mass unemployment has had on the full-time and part-time staff of NACAB? The review body is welcome to visit Birmingham, where NACAB provides a local service that cannot be provided by any other body. There is nothing whatsoever to hide.

Dr. Vaughan: The hon. Member seems to be a little confused. Once again, he is mixing up a number of different points and trying to make some rather cheap political remarks by widening the issue. I have already had an invitation to visit one of the Birmingham bureaux, which I am happy to accept. I do not see any relationship between DHSS activities and what we are talking about today.

Mr. James Molyneaux: Will the Minister acknowledge that there will be a warm welcome in Northern Ireland for the resumption of funding for the current year? Will he ensure that local authorities are not discouraged from expanding the assistance that they give to the local citizens advice bureau, particularly in the light of increases in overheads through charges for rents and so on?

Dr. Vaughan: I assure the hon. Gentleman that overall funding of NACAB was never in any doubt. We were discussing the distribution and the allocation of funds. I am happy to take note of the hon. Gentleman's points.

Mr. Robert Hicks: Will my hon. Friend accept, from one who was critical of his initial decision, grateful thanks that he is to restore the second £3 million? Is he aware that some uncertainty has been created as a consequence of the events of the past 10 days or so? Therefore, will he consider issuing a circular to local authorities so that they continue to support these worthwhile voluntary organisations?

Dr. Vaughan: I welcome my hon. Friend's remarks on the general issues. I said clearly on Friday that I would be looking seriously at the possibility of a circular.

Mr. John Home Robertson: As a former local CAB chairman, I am relieved that the Minister has withdrawn his ill-judged threat to cut CABs' funding this year. On a Scottish point, is the inquisition that the Minister has announced to extend to the entirely autonomous Scottish parts of the CABs? If so, is that necessary, as SACAB's organisation and staffing have already gone through an inspection by the Minister's Department in recent months? Has the Minister had any specific complaint about political bias in Scottish CABs? When does he expect to reply to the parliamentary question that I tabled on this issue, which should have been dealt with six days ago?

Dr. Vaughan: I resent the suggestion that this is an inquisition. This is a review, agreed between the Government and NACAB. The hon. Gentleman does not do justice to NACAB when he tries to claim that in some way the review will be an aggressive inquisitorial attack. There is no question of a cut, and I have made that clear

in a series of remarks. There have been three letters from Scotland, each of which has made a complaint, and I shall be answering the hon. Member's question today.

Mr. Tom McNally: Will the Minister make it clear that, in its terms of reference, the inquiry team has the right to recommend that the added burden put on national and local CABs could result in advice, which the Government will accept, that the association needs more money, not less?

Dr. Vaughan: I refer the hon. Gentleman to the terms of reference of the inquiry, which are:
To review the functioning of the National Association … with a view to ensuring that the Association gives the best possible service and support to local citizens advice bureaux".

Mr. W. R. Rees-Davies: I congratulate the Minister on arriving at an agreed review, but will that review be able to consider whether there is any party political bias in any of these bureaux and be able to make recommendations accordingly? In the citizens advice bureaux that I have been conversant with over many years, there never has been any party political bias, and there is no reason why there should be. Will it be within the terms of reference to make a recommendation in that regard?

Dr. Vaughan: The agreed terms of reference have been designed to be as constructive and helpful as possible to the movement as a whole. It will be for the independent review team to determine what it looks at within the terms of reference.

Mr. David Ennals: I welcome the decision to extend the grant for a further six months. Does the Minister accept that most of those who have had close contact with NACAB think that the review is unnecessary? Is he aware that his intervention has caused a great deal of concern, not so much to the public, who already have a great respect for the work of individual advice bureaux, as to the many thousands of volunteers who unstintingly give their time so that the services can be provided? Is the Minister aware of what he has done to those—most of them quite non-political—who give their time to help this service?

Dr. Vaughan: If there has been concern—I accept that there has been some—it is generated and increased by remarks such as those that the right hon. Gentleman has been making.

Mr. Peter Bottomley: Had the hon. Member for Battersea, South (Mr. Dubs) been here, I am sure that he would have joined me in congratulating both the national association and my hon. Friend on reaching agreement. I understand that the national association welcomes this early review rather than the later inspection that had been planned. Will the review make recommendations so that the results of the work of the CABs can be shown to those public authorities and Government Departments that might be able to adjust their approach to consumers of services in such a way that the CABs need not grow year by year as they are at the moment?

Dr. Vaughan: I welcome my hon. Friend's remarks. I see the review as a constructive exercise, agreed between NACAB and the Government, which will be of service to the movement.

Mr. Lewis Carter-Jones: As a kindly and courteous man, will the Minister make a public apology to all members of the CABs, who have given their services willingly, for the slurs that he cast upon them?

Dr. Vaughan: I do not see those remarks as either kindly or courteous. I have never at any time cast any aspersions on or allegations against the local CABs.

Mr. Carter-Jones: Somebody has.

Dr. Vaughan: If the hon. Gentleman read my statements, he would know that I have not done so.

Mr. Tony Marlow: Does NACAB have any political role with regard to putting overt or covert pressure on the Government to change their policies?

Dr. Vaughan: None whatsoever.

Several Hon. Members: rose—

Mr. Speaker: Order. If they are brief, I shall call those hon. Members who are standing, but I hope that they will be brief.

Mr. Ioan Evans: Will the Minister admit that he has publicly mishandled the attack on the CABs and take this opportunity of paying tribute to the fact that, in the past 12 months, the bureaux have had an increase of 11 per cent. in their cases, dealing with over 5 million, many of which have been brought about by the Government? Does the Minister realise that Members of Parliament are already overburdened with problems facing their constituents, and that if the CABs did not exist the burden on hon. Members would be far greater?

Dr. Vaughan: The hon. Gentleman obviously has not been following the exchanges. Over and again, I have paid tribute to the work done by the CABs and to the way in which the Government over the past three years have consistently increased the funds available to the CABs. That shows the amount of support that we give the association.

Mr. Christopher Price: Although I welcome the fact that the inquiry is going out to tender and is not being handed out without tender as the Government have been accustomed to do recently in other matters, in broad terms what is the expected cost of this, where is the money to come from and will it come from the money originally allocated to NACAB?

Dr. Vaughan: The money will be met by the Government. It is not coming from the allegation —[Laughter.]—the allocation—to NACAB. The review will be of service to all CABs.

Mr. Bob Cryer: How much will the inquiry cost? Will it not be an expensive exercise in face-saving, to which the Minister is stooping after having made—or having acknowledged — a number of unsubstantiated innuendoes? Does not the result appear to be a combination of a witch hunt and a face-saving exercise? As the Government place a cash limit on virtually every activity, except defence, upon which they get their dirty little fingers, why will the Minister not tell the House the cost of this exercise?

Dr. Vaughan: For the simple reason, as the hon. Gentleman knows, that until we receive the tenders and examine the scope of the review—a better word than inquiry—we will not know the exact cost. However, I assure the hon. Gentleman that it will be done thoroughly and quickly because we see great advantages in having a full review, done properly and rapidly.

Mr. Arthur Davidson: Why does not the Minister, in simple language, withdraw the unfounded allegation of political bias? It is not a difficult thing for him to do. He must understand that those who help in citizens advice bureaux, particularly those who give advice in a professional or semi-professional capacity, must be seen to be giving that advice free from bias. He owes it to them to withdraw the slur.

Dr. Vaughan: I am disappointed that the hon. and learned Gentleman does not welcome what we are doing and accept it in the spirit in which it has been entered into. I do not see how I can possibly withdraw allegations that I have not made. It is part of my job to pass on complaints as they arise and that is what I have been doing. I should have thought that I was the person who had been most witch-hunted. [HON. MEMBERS: "Oh".]

Mr. Clinton Davis: If the Minister has that sense of aggression it may be because he has been something of a witch. Is he aware that workers in the citizens advice bureaux in my borough to whom I have spoken volunteered to me the fact that they were incensed by his statement and that they believe that a slur has been deliberately cast on them? If that was not his intention, why did he specifically refer to the allegations that have been reported to him that citizens advice bureaux have been engaged in biased political activities? Was there any need for the hon. Gentleman to refer to that?

Dr. Vaughan: I hope that when those anxieties were put to him the hon. Gentleman reassured the local volunteers and I hope that he did not do so in quite the terms that he has just used to me. I welcome NACAB's recent reaffirmation of political impartiality in the CAB service and the assurances that I have received that any breach of that principle will be thoroughly investigated.

House Transfer (Amendment)

Mr. Bowen Wells: I beg to move,
That leave be given to bring in a Bill to extend competition in relation to services in connection with the transfer of ownership of houses in England and Wales, by amending section 22 of the Solicitors Act 1974.
My proposed Bill would permit those who are not solicitors to prepare and register transfers or charges in respect of dwelling-houses the title to which is already registered under the Land Registration Act 1925. The Bill would therefore be restricted to houses for which the first registration and initial subdivision had been undertaken by a solicitor, or to what might be loosely referred to as secondhand houses, the title to which had not been altered since the first sale. It is estimated that the procedure might apply to about 70 per cent. of secondhand house transactions at present, the rest remaining on unregistered title whose conveyance would have to be undertaken by a solicitor. In short, it seeks to take advantage of the great progress that has been made as a result of the Land Registration Act 1925.
The objective of my Bill is to make it possible for an enforceable contract of sale between a vendor and a purchaser to be signed in the shortest possible time, which should average no more than one month and preferably a shorter period. You may think, Mr. Speaker, that the amendment of the Solicitors Act in the way that I have outlined and the objective of my Bill are unrelated, but I shall explain the connection later in my speech. There is a need for action to be taken on simplifying, streamlining and reducing the expenses involved in house transfer. First, there is the compelling statistical evidence that home ownership has increased dramatically since 1918, when 10 per cent. of the housing stock of England and Wales was owner-occupied. In 1979, 60 years later, the evidence given to the Royal Commission on legal services by the Registrar of Lands said that 53 per cent. of the housing stock was then owner-occupied.
The House, under the able direction of my hon. Friend the Minister for Housing and Construction, has enabled over 1 million people to own their homes under the right-to-buy legislation. The figures emphasise the urgent need to seek a quick and inexpensive method to permit home owners to buy and sell homes easily and safely, unencumbered by out-of-date practices that are no longer necessary.
The second administrative reason for modernising our methods is that the land registry system that was introduced in 1925 will, it is hoped, be extended to the whole of England and Wales by 1985. As the House knows, under that excellent system the title to property is guaranteed by the state. In 1804, when the solicitors first acquired the monopoly of conveyancing, the reason given was that title to property was often defective and the interests of the public could be safeguarded only by those properly trained and bound by a set of rules of good conduct which was enforceable by their profession. That monopoly was granted by King George IV in exchange for their agreement to collect stamp duty on his behalf. With the advance of the land registry system those considerations have almost completely disappeared, so there are good and sound reasons for reform from an administrative and technical point of view.
The most compelling reason for change is the heart-rending and traumatic experiences of many people who have had the misfortune to be impoverished and harassed by the practical effects of the present system. Let me read to the House a few extracts from the hundreds of letters that I received following the "You and Yours" programme on this subject on Radio 4, so that people can speak for themselves. A letter dated 13 April—eight months after my correspondent had decided to buy a house—said:
My wife and I saw a house we wanted to buy in August 1982. We made an offer for it which was accepted. Since then we have `sold' the house we are living in three times. We hope to move in in less than three weeks' time but have yet to exchange contracts because of a series of little problems at various stages in the chain. This week's problem is an inability between two solicitors to agree on the completion date. Because contracts have not been exchanged yet any one of six parties (and seven solicitors) in the chain can change his mind and the whole series of transactions could collapse. Delays we can handle but this uncertainty is difficult to bear.
Another letter said:
After three months we thought we were ready to exchange contracts. Our purchaser withdrew and within days we received a bill from our solicitor for £200 and, not satisfied with sending us the bill so quickly, he tried to take the money out of our deposit for our purchase which we had only then handed over to him. We are now sure that our purchaser had already been buying another property when we signed contracts. The whole business has been a nightmare to us. It is a most traumatic experience to go through all those months of anxiety and then be left with nothing but a large bill.
Those are two samples of hundreds of letters that complain of the long delays, expense, genuine nervous tension and exasperation which the present system induces. Therefore, it seems imperative for those of us who are representatives of our people to seek urgently an alternative method without sacrificing the necesssary safeguards that the present system affords.
I said that I would explain why introducing competition into transferring houses by permitting persons other than solicitors to prepare and register transfer of title will bring an end to the build-up of what I call daisy chains of house buyers. The only way to prevent the present practice is to effect an enforceable contract between the two parties quickly. If it were possible for building societies, banks, property developers, estate agents and others to effect transfer, they would compete with solicitors to provide a service to the customer.
It is perfectly possible under our present system to effect a quick contract if both parties want it but a solicitor would not advise such haste without first checking the title and making certain that it was unencumbered, that there were no planning proposals which might affect the property, and that the house was structurally sound. Other than the question of title, which is now successfully guaranteed by the Land Registry, all the other matters can be checked by anyone and they do not require legal knowledge. Indeed, under present law the contract of sale does not have to be drawn by a solicitor. All these functions could be carried out in one office, much to the benefit of the clients and avoiding the delay inherent in the present system.
Precontract preparation could be done by all buyers and sellers in the following ways. First, the vendors' agent or solicitor would prepare a contract of sale before the property was marketed. Secondly, the mortgagee would have to be warned of the impending redemption of the mortgage. Thirdly, the vendor or agent would make local searches and inquiries before the sale. Fourthly, the


vendor would commission a report and valuation inspection report, so avoiding multiple surveys. Fifthly, the purchaser would satisfy the estate agent that he had the money or a promise of a loan and income sufficient to purchase the property. Sixthly, the agreement would be a standardised form of mortgage.
In case the House thinks that such reforms are too radical, I refer hon. Members to the report of the Royal Commission on legal services published in 1979 in which such reforms were suggested. The Royal Commission favoured the retention of the solicitors' monopoly and even its extension to the contract of sale. It also suggested that the Law Commission or the Law Society should establish a standing conveyancing committee which would include practising lawyers, building societies, estate agents, consumer organisations and developers to consider the reforms. However, neither body of lawyers has taken any steps to effect the Royal Commission's recommendations.
With the computerisation of the Land Registry and the records of the local authorities, it should be possible to check all factors by simply pressing a few buttons on a computer. In the absence of any move to reform, which I understand the Law Society promised the Royal Commission that it would urgently undertake, I believe that we must open house transfers to the winds of competition so that those more concerned with serving the public will themselves effect the necessary reforms.
That is not foolhardy, because the titles are now guaranteed and people lending money for house purchases will make certain that their money is lent on sound title and contract of sale. As house purchase is normally the largest transaction undertaken by most people, purchasers will also be very concerned to ensure that it is properly and correctly carried out.
With the title guaranteed, the transaction becomes similar to hire purchase, over which agreements solicitors have no monopoly. However, there is a need to establish a system of bonding those who handle clients' money and for insurance against the possibility of mistakes.
I hope that my Bill will focus the mind of those in Government and in the professions so that reform will be introduced voluntarily, but quickly. That will be much to the benefit of the professional standing and public respect of the solicitors who now unfairly take all the criticism for the system's shortcomings.
When the burden of criticism is lifted from their shoulders, I am sure that solicitors will be able to attract a large share of the business. Above all, I hope that the Bill will prevent the worry, delay and losses caused by housing chains from which so many of our increasing number of home owners suffer when they buy and sell their homes. I have pleasure in commending the Bill to the House.

Question put and agreed to.

Bill ordered to be brought in by Mr. Bowen Wells, Mr. John Heddle, Mr. Richard Page and Mr. Robin Squire.

HOUSE TRANSFER (AMENDMENT)

Mr. Bowen Wells accordingly presented a Bill to extend competition in relation to services in connection with the transfer of ownership of houses in England and Wales, by amending section 22 of the Solicitors Act 1974: And the same was read the First time; and ordered to be read a Second time upon Friday 8 July and to be printed. [Bill 140.]

Orders of the Day — Finance Bill

(Clauses 12, 16, 63, 73 and 88; Schedule 11; new clauses relating to the national insurance surcharge or the rate of value added tax first appearing on the Order Paper not later than 19 April.)

Considered in Committee. [Progress 25 April]

[MR. BERNARD WEATH BRILL in the Chair]

New Clause 1

REDUCTION OF RATE OF VALUE ADDED TAX

'In section 9 of the Finance Act 1972 for the words "15 per cent." there shall be substituted the words "13 per cent ".'—[Mr. Straw.]

Brought up, and read the First time.

Mr. Jack Straw: I beg to move, That the clause be read a Second time.

The Chairman of Ways and Means (Mr. Bernard Weatherill): With this it will be convenient to discuss new clause 5—Decrease of rate of value-added tax.

Mr. Straw: The cost of reducing value added tax by 2 per cent. in this way would be about £1 billion in the first year and £1,380 million in a full year. It would have the effect of reducing the retail prices index by 1 per cent.
Although VAT is a key revenue raiser and its imposition a matter for continuing discontent and controversy, this is the first opportunity that the House has had to debate VAT since the Chancellor of the Exchequer doubled the rate in his first Budget on 12 June 1979. As we near the end of this Parliament, we are afforded an occasion to examine the Government's record on indirect taxation and to advance our case for reducing VAT by 2 per cent. Such a reduction is a component of any strategy to secure the sustained recovery in output and employment that our economy so desperately needs.
On Tuesday we debated at length the Government's broken promises and their dishonoured bribes about direct taxation. Ministers may wriggle and squirm, but they know, we know and the country knows that they promised to reduce the burden of direct taxation, but instead they have raised it for all but the very rich. The Government's record on direct taxation, on income tax and national insurance, is bad enough, but their record on taxation as a whole—on excise duties and value added tax— is appalling. It shows that in 1979 the Government treated the electorate with a cynical contempt that almost beggars belief.
Many Members seem to be suffering from collective amnesia. I shall remind the House of what happened in April and May 1979. Early in the election campaign the Conservatives issued their manifesto and promised to
cut income tax at all levels to reward hard work, responsibility and success".
As the election campaign progressed, senior Tory spokesmen expanded the manifesto promise and made it clear that they proposed to reduce taxes on earnings, including national insurance contributions as well as income tax. The Conservatives refused to do the arithmetic or make costings to support their bribes, so the Labour party had to do it for them.
We charged the then shadow Chancellor with misleading the nation. We said that there was no way in the world in which Conservatives could reduce direct taxation on the scale that they envisaged without doubling VAT.
We all remember the response by the Conservative party and its lickspittle, the Daily Mail. They said that the suggestion that they would double value added tax was a lie. That was repeated in the Daily Mail of Thursday 28 April 1979. Since the Daily Mail goes on about the Government's inflation record, it is worth rereading that issue of the Daily Mail. The price of that paper has doubled under this Government. It was 9p in 1979 and it is 18p today. It is no better value today than it was then.

The Economic Secretary to the Treasury (Mr. Jock Bruce-Gardyne): How much did it cost in 1974?

Mr. Straw: I do not know. The Government claim to have a fine record for inflation, and yet the Daily Mail, their mouthpiece and organ, has doubled in price in four years.
We all remember the so-called lies. It was said that we lied when we said that the Conservatives had claimed that there would be no freeze on European food prices. They said that it was a lie for us to suggest that British Petroleum would be hived off, that unions might be clobbered through legislation and that British Airways might be privatised. Above all, it was said that it was a lie for us to suggest that the Conservatives would introduce higher prescription charges. The Conservatives said that they had no intention of increasing such charges. The Chief Secretary should wipe the cynical smile from his face because prescription charges have not doubled or trebled —they have increased by a factor of over six.
The Conservatives also said:
We have absolutely no intention of doubling value added tax.
We all know what happened. The Prime Minister and the Chancellor came as close to lying as we have ever seen in an election campaign. Within five weeks, VAT had almost doubled at 15 per cent. Of course, once again, they tried to brazen it out. The former Financial Secretary, the right hon. Member for Blaby (Mr. Lawson), asserted that the Government had not, after all, doubled the zero rate.
Besides reminding ourselves about the enormity of the Government's deception in 1979, it is important for us to examine the excuse that the Chancellor gave to the House in his Budget statement on 12 June, when he announced that value added tax would be increased to 15 per cent.

Mr. Tony Marlow: I am concerned for the hon. Gentleman because he must be uncomfortable in making his speech. One has heard of the pot calling the kettle black, but, having read various things that the Labour party has put forward, one comes to believe that the raison d'être of the Labour party is to increase taxation on the British people. The hon. Gentleman appears to be making a case against the tax policies of Her Majesty's Government. Is the hon. Gentleman feeling slightly uncomfortable?

Mr. Straw: As usual, the hon. Member for Northampton, North (Mr. Marlow) is misinformed. If he had read Labour's programme with the assiduity with which Treasury Ministers claim to have read it, he would

realise that there is no suggestion that we shall increase taxation in the early stages of our Government. This debate is about the Government's record. We did not go into the previous election promising to reduce direct taxation and promising that VAT would not be doubled. The Government's record is under examination today.

Mr. Marlow: Is the hon. Gentleman telling the House that if a Labour Government come to power, which most of us believe will not happen, they will not increase taxation?

The Chief Secretary to the Treasury (Mr. Leon Brittan): Answer the question.

Mr. Straw: I shall be delighted to answer the question. We make it clear in our programme that we do not believe that an increase in taxation would assist to secure a recovery of the economy and assist in our programme. Indeed, over the period of an expansionary programme, the proportion of taxation as a proportion of our total national income would fall. One of the great ironies is that while the present Government have cut public spending, public spending as a proportion of the national cake has increased, as the Chief Secretary knows to his discomfort.

Mr. Lewis Carter-Jones: Will my hon. Friend give the hon. Member for Northampton, North (Mr. Marlow) a lesson in arithmetic? VAT was 8 per cent.; it is now 15 per cent. The rate has doubled under the present Government.

Mr. Straw: The hon. Member for Northampton, North and his right hon. Friends promised at the last election that direct taxation would be reduced and said scarcely a word about increasing value added tax.
4.45 pm
In his first Budget speech on 12 June 1979 in which he announced that VAT would rise to 15 per cent., the Chancellor said:
We made it clear in our manifesto that we intended to switch some of the tax burden from taxes on earnings to taxes on spending." — [Official Report, 12 June 1979; Vol. 968, c. 249–50.]
We all know that the Chancellor is keen to try to rewrite history. In his 1982 Budget speech he claimed that two Parliaments would be needed to implement the Government's programme. The Conservatives said in their manifesto:
We must therefore be prepared to switch to some extent from taxes on earnings to taxes on spending.
They went on to promise that they would simplify VAT. Neither of those statements conveys the idea that they would double VAT. In the same paragraph, the Conservatives promised to tackle the proverty trap. They did indeed tackle the poverty trap by making it much worse. We should have anticipated that the promise to simplify value added tax would mean an increase to a nice round number such as 15 per cent.
Having referred to the Government's manifesto commitment, such as it was, the Chancellor in his Budget statement of 12 June went on to say that increasing taxes on spending, such as value added tax, would be
the only way that we can restore incentives and make it more worthwhile to work and, at the same time, increase the freedom of choice of the individual … Moreover, the increase…must be sufficient to provide for substantial and worthwhile reductions in income tax.
He concluded that the doubling of VAT would
provide scope for further direct tax reductions in later years." —[Official Report, 12 June 1979; Vol. 968, c. 250–51.]


So the doubling of VAT was sold to the House on the basis that it would enable the Government to reduce direct taxation not only in the first year of the Government but in subsequent years.
It is a testament and a tribute to the unparalleled mismanagement of the economy by the Government that over the past four years they have pulled off the double of a dramatic increase in indirect taxes and a dramatic increase in the burden of indirect taxation. The average family's overall tax burden is equivalent today to a 7p in the pound increase in income tax, as the Treasury has recently been forced to admit. Figures given in answer to questions from me and then translated by the Library into constant price terms show that a family with two children on average income with the wife not working has seen its overall tax bill rise by £61·65 in 1978–79 to £71·40—a rise of almost £10. Before the Economic Secretary to the Treasury asks whether child benefit is included in that calculation, let me say that the increase for a married couple without children where child benefit does not feature has been even greater. Their direct tax bill has increased not by £10 but by £11·27 over the past four years in constant price terms.
The amounts that the Government are taking out of the economy, as one would expect, have risen dramatically. In 1978–79 indirect taxes, including value added tax, yielded £30 billion in constant price terms. Today, after adjusting the yield for inflation, the figure has increased by one third to £40 billion in 1978–79 constant price terms. At the same time the Government have increased the burden of direct taxation from £27 billion to £33 billion, an increase of 25 per cent.
The increase in value added tax had a further and more serious effect on the economy as a whole. It dramatically forced up the rate of inflation. Inflation was running at 10 per cent. in May 1979 and would not have increased much above that figure by the end of that year.

Mr. Bruce-Gardyne: indicated dissent.

Mr. Straw: Ministers know that to be the case. The increase in value added tax pushed up the retail prices graph vertically. It was the sharpest rise ever. It meant that by the end of that year inflation was running at 17·5 per cent.; by the early spring of 1980 it was running at 19·5 per cent. and it peaked at 22 per cent. in the middle of that year.
Throughout this Parliament we have witnessed an astonishing evasion of responsibility by the Prime Minister and her colleagues. If anything goes wrong, it is always the fault of someone else. The rise in unemployment and the catastrophic fall in production are blamed on forces beyond the Government's control, despite the fact that our collapse has been far greater than that of any of our major competitors, our rise in unemployment has been far greater and we have had the benefit of North Sea oil. We should have been able to ride those problems better than other countries.
When inflation falls, it is all to the Government's credit, despite the fact that the fall in inflation in this country has been little better than that in the countries of our major competitors. When inflation rose, we were told that it was nothing to do with the Government—but it was. The increase in inflation during the Government's first year was not the result of the Clegg wage increase or of the profiteering of oil sheikhs. It followed as a direct

consequence of a deliberate Government policy to double value added tax. That decision, combined with general deflationary policies practised by the Government, contributed in a major way to Britain's unique collapse.
Our performance on inflation and unemployment compared with our major competitors is instructive. I hope that the Chief Secretary will listen to this, because it is clear from his speeches that even he is blind to Britain's relative position. The Prime Minister has talked about Britain's spectacular inflation record, but the truth is that it is simply average while our unemployment record is spectacularly bad.
In May 1979, inflation in the western industrialised world was 9·7 per cent. Here, it was 0·6 per cent. more at 10·3 per cent. May I have the attention of the Front Bench for these figures? Inflation in Britain is now 5·3 per cent., but in the rest of the world the average is now 5·7 per cent. In other words, in 1979 we were 0·6 per cent. above the average, and today we are 0·4 per cent. below the average.
However, in 1979 unemployment in the United Kingdom was just above the average for the western industrialised world. It was 5·5 per cent. on a standardised basis compared with 5·1 per cent. It is not true, as the Prime Minister and her Ministers assert, that in the last four years Britain has done no worse than other countries. In no other major western country has unemployment risen faster or further than here. Today, Britain's unemployment rate is 13·3 per cent., while the average in the rest of the western industrial world is only 8·9 per cent. Therefore, the rise in unemployment here has been twice that in the rest of the western industrialised world.
The Government take credit for their record on inflation and somehow suggest that it has fallen as a direct consequence of the monetary policies that they have followed. In fact, the fall has virtually nothing to do with their performance in attempting to control the money supply. If the relationship between the money supply and inflation was what the Conservative party so naively believed when in Opposition, 1982 and early 1983 should have been a period of double-digit inflation on the back of the double-digit growth in the money supply about 18 months or two years previously. That was exactly what one of the British gurus of monetarism, Professor Brian Griffiths of the City university, predicted in the middle of 1981.
The fall in inflation has been due partly to world factors, particularly the collapse in commodity prices, which at the end of last year were in real terms 30 per cent. below their 1980 level, and partly to the penal and unanticipated consequences of monetary policy. The Government thought that that would reduce inflation and increase output and jobs, but instead it turned into a crucifying, old-fashioned deflationary squeeze with record high interest rates to boot. In other words, the fall in inflation has been built on a consequence of that squeeze, high interest rates and an artificially over-priced pound. The price that we have paid has been an extra 2 million on the dole.

Mr. Marlow: The hon. Gentleman is making comparisons with this and that. What has happened to inflation in France and why has that happened?

Mr. Straw: Inflation and unemployment have been falling for the last four months. The unemployment rate


in France is 2 million, not 3° million. Having given way three times to the hon. Gentleman, I hope that he will do something unique and defend the Government's taxation policy. These debates have been characterised by a deafening silence from Conservative Members in defence of the Government's taxation record.
The increase in the price of the pound has meant a dramatic loss of competitiveness, which up to mid-1981 was quite unparalleled in our post-war history. Last November, my right hon. Friends the Members for Stepney and Poplar (Mr. Shore) and for Ashton-under-Lyne (Mr. Sheldon), my hon. Friend the Member for Edinburgh, Central (Mr. Cook) and myself published Labour's programme for recovery. We said that a sustained recovery of manufacturing output and the British economy would not be possible unless Britain's competitiveness was restored, not least by the restoration of the pound to competitive levels. We also said that the impact of such a restoration would need to be offset by cutting industry's costs through the abolition of the national insurance surcharge and by acting directly on the retail price index by reducing VAT.
At the time when we called for a more competitive pound, the response from some Ministers and some sections of the press was as though my right hon. Friends and I had committed gross indecency in a public place. Indeed, the Chancellor, ever anxious to evade responsibility for anything that he does not like, sought to blame us for the fall in sterling that took place in November, despite the fact that the fall had begun a week before publication of our paper. How quickly times change. November's heresy is today's conventional wisdom.
Between last autumn and March, sterling had depreciated against other currencies by about 13 per cent., and the Chancellor and many members of the CBI suddenly discovered the virtue of a more competitive pound. I can do no better than quote the president of the Blackburn chamber of commerce, Mr. Geoff Livesey, a leading member of the north-west region of the CBI. He told the Lancashire Evening Telegraph on 21 January:
The message for the last two years has been that the pound was over-valued and has caused enormous hardship for manufacturers. The converse must be that with devaluation of this magnitude, we are becoming competitive again, whether we are exporting or offering an alternative to imports".
As my right hon. Friend the Member for Stepney and Poplar pointed out on Second Reading, even the Chancellor began to echo the sentiments about the value of a lower pound, because when he objected to the NEDC report on 11 April and condemned it for its gloomy prognostications about the British economy, he said that
it failed to pinpoint the improving economic prospects being created by such things as the lower pound".
That sentiment was echoed by the Chief Secretary's brother, the economic editor of the Financial Times, who said that the modest upturn
has been amplified in Britain's case by a major improvement in competitiveness, as a result of the fall in sterling since last November".
He added:
Far and away the most important reason
why things were improving in the United Kingdom—
has been the depreciation of sterling".

Mr. Marlow: Will the hon. Gentleman give way?

Mr. Straw: Not again.

Mr. Marlow: Frit.

Mr. Straw: We are never frit of the hon. Gentleman. That is usually the case with his hon. Friends on the Government Front Bench, which is why he usually gets more change out of us than he does from them.
The Chancellor has been right to emphasise how crucial the fall in sterling has been in modestly improving Britain's economic prospects. As the Chief Secretary admitted to me in answer to a parliamentary question in mid-December, three quarters of the improvement in Britain's competitiveness has been due to the fall in sterling.
5 pm
There is no question but that what marginal improvement in output has taken place, and is likely under the present Government to take place, has occurred principally as a result of sterling's fall. But the changes in output which have occurred and the prospects for any real recovery in present circumstances are fragile indeed. In a pre-election period, most newspapers, Ministers and the Tories' industrial poodle, the CBI, wish to put the most favourable gloss that they can on any titbit of news which suggests that the economy is doing a little better than it was last year or in 1981, but we notice how reluctant they are to compare the economy today with its performance in May 1979.
The evidence of the fragility of Britain's economy and the falseness of the wild claims by Ministers about any major recovery come not only from our constituencies, where the pace of redundancies continues unabated, but directly from the small print of the CBI's survey of industrial trends, published this morning. For all the headlines in the newspapers today, the truth is that that survey shows that the real changes in the British economy in the last quarter have been marginal. They also show that the economy is still in a greater state of collapse and depression than at any time since the war.
It is clear that 72 per cent. of firms record in that survey that they are still working below capacity, 51 per cent. say that their order books are below normal and only 10 per cent. say they are above normal. But most significant of all are the responses to the questions about future output and employment. In the last four months, only 8 per cent. of firms in Britain took on more staff; 40 per cent. kept the numbers of employees the same; and 52 per cent. declared redundancies. As for the next four months—which, we are told, herald a new economic dawn—four times as many firms are expecting to sack workers as are expecting to take workers on; 40 per cent. as against 11 per cent.
When asked which factors were likely to limit output in the next four months, 89 per cent.—nine out of 10—still say that orders and sales, or a straightforward lack of demand, are the limiting factors. There is no need to look into the crystal ball to see whether economic recovery will take place. We have the facts and they show that it is a simple deception to suggest that we are involved in anything that could seriously be described as a major recovery.

Mr. Bruce-Gardyne: The hon. Gentleman has made virtually no mention of the new clause which he puts before the Committee, nor one word of argument in support or advancement of it. Is it his intention. to withdraw it from our consideration? If so, we might as well know now.

Mr. Straw: I was expecting something better even from the Economic Secretary. If that is all he can do as editor of the Daily Telegraph, there will not be much hope for that newspaper either. I referred in my very first words to the cost of the change and its impact on the retail price index and, when discussing the programme for recovery, I said that we saw a reduction in VAT as an important component of any strategy for recovery. I could not have made it plainer if I tried.
In the last two and a half weeks—we must discuss the question of the economic prospects under the present Government — since the Chancellor attacked "Neddy" for its failure to take account of improving economic prospects through sterling's fall, sterling has appreciated again in value by about 6 per cent. The admitted principal engine of recovery—the fall in sterling—has now gone into reverse and the Government, instead of doing something about it, once again stand on the sidelines unwilling or incapable of taking any action.
It is extraordinary, given the importance of international trade to the British economy, that the Government not only claim not to have an exchange rate policy but genuinely do not seem to have one. The result has been far more volatility in the exchange markets than there need have been and interest rates have been kept unnecessarily high; in real terms, they are at their highest rate ever. An exchange rate policy would not be a magic wand over the markets, and we have never suggested that it would. But if the Government had had an exchange rate policy, the Chancellor — having decided two weeks ago that sterling's level, at about 80, was of great assistance to the British economy — could, and should, have used a reduction in interest rates to meet the temporary increase in sterling's price in the last two weeks. Indeed, if the Chancellor is serious about recovery, he should now reduce interest rates by at least two percentage points.

Mr. Marlow: What about VAT?

Mr. Straw: Hon. Gentlemen opposite do not understand that the case for a reduction in VAT is the case for a strategy which seeks to put our economy on the road to recovery. They do not appreciate that the case for a VAT reduction stands or falls on whether under this Government there will be any sustained recovery.
I call for a reduction in interest rates of two percentage points so that we can see sterling returning to the competitive levels it was at two or three weeks ago. That would still provide a rate of return for lenders at historically high levels while at the same time providing a major boost to British industry in a non-inflationary way. The simple truth is that the Government are not serious about recovery. Indeed, they have no strategy for sustained recovery. That is well illustrated by the deafening silence on the Benches opposite as to the way they would cope with the inflationary pressures that may arise whenever any recovery gets under way.
Although there is some dispute about the exact relationship, it is a matter of simple arithmetic that a fall in sterling would add something to industry's costs, as onethird of what we in this country consume is imported. The Chancellor used to tell us that repeatedly, although since sterling's fall over the new year it is a factor which worries hon. Gentlemen opposite rather less. But we already see wholesale prices rising by 7·4 per cent. —getting on for double the rate of retail price rises—and,

unless action is taken, the rise in retail prices later this year and early next year could be 7 to 8 per cent. and on the way up.
It is in that context that our proposal to reduce VAT by two percentage points makes sense. It would reduce the retail price index, on the Treasury's own estimate, by one percentage point and mean that the RPI early next year would be 6 to 7 per cent. rather than 7 to 8 per cent. This proposal is part of a coherent programme to put the nation back on the road to sustained recovery; not to ignore the inflationary implications, as the Government seem to do, but to take action directly to deal with them. It ties in with our proposals, to be debated tomorrow, for the complete abolition of the national insurance surcharge and with our proposals, published in Labour's alternative budget on 8 March, for a careful increase in public spending on housing, construction, major capital projects and the public services.
We need no lectures from hon. Members opposite about the costings of our programme. No Opposition have provided more detail about their programme or better costings than we have, nor shown how our individual policies would have to be contained within an overall programme of public spending. I only wish that the Chancellor and his colleagues had done the same before the last election. Had they done so, they would not have deluded either themselves or the electorate about the likely outcome of their policies.
The country is faced with a simple choice. It has a Government who are bankrupt of fresh ideas and who were elected on clear pledges to create more jobs and greater national output and to lower taxes, all within the lifetime of this Parliament. They are pledges on which they have failed the nation and they have broken every promise they made. What remains offers no hope to the bulk of the people. Or they can choose a party with a programme that places the people of the nation before the prejudices of a few and that will put this country back on the road to recovery. We did that after the war and we will do it again. I commend the new clause to the Committee.

Mr. John Horam: New clause 5 is in the same group as new clause 1, and is in the name of the Liberal and Social Democratic parties. I wish to address my remarks to it. I shall endeavour to stick to the new clause rather than rambling wide and lengthily as the hon. Member for Blackburn (Mr. Straw) did, although he did so in an interesting fashion.
The point of our new clause is to cut VAT in October from its present level to 12·5 per cent. The object is that the Government should take direct action to cut into the rate of inflation when it starts to rise again. We know fairly clearly what will happen over the next 12 months or so on the economic scene. It looks likely that inflation will be back to 6 per cent. and possibly higher, come the autumn, as measured by the retail price index. The reason is the falling pound that we have had over the past four or five months finally feeding through to price increases. It has been helpful to industry, as has been said, but there will be a price to pay—no pun intended—in terms of high prices in the autumn.
Those high prices, as we saw when the Government foolishly doubled VAT when they first came to office, will pass through to higher wages. Not only that, but the small recovery that we are now seeing will lead to higher profits —inevitably and rightly so because we need them—and


this will lead to higher wage claims. The workers will expect some share of the higher profits, having made sacrifices when there were no profits.
For those two reasons, both to match the increase in the RPI and to take a share of the higher profits, there will be higher wage claims and higher settlements this autumn. Those higher wages will, in turn, spark off a spiral of higher prices. Many forecasters are saying that by spring next year the RPI could be increasing not just at 6 per cent. or 7 per cent. a year but at 9 per cent. or 10 per cent. a year. That is the forward view on inflation. When we reach that stage, the Government, under their policy, will inevitably have to resort to tight money and higher interest rates to choke the increase in prices. The interest rates will have an effect on business. Business will be facing higher costs anyway with higher wages. It will start to destock, recovery will be hit on the head and unemployment will start to increase again.
That is predicted not just by us but by many leading forecasters. A forecast of the St. James's group, which is one of about 10 groups that regularly make forecasts, was reported in The Economist on 23 April. It states:
Faster growth, however, soon peters out. Thanks to fast-rising wages, inflation is rekindled, and is kept below 10 per cent. only by tight money, which produces high interest rates. High costs and interest rates make companies destock, output slows, exports sag and workers are shed again as Britain enters a new recession".
That is the basis of the cut-and-run charge that would be rightly made against the Government if they go for a June election. We are now seeing the small glimmerings of a slight improvement and of a new light in the medieval gloom—

Mr. George Foulkes: You are doing well.

The Chairman: Order.

Mr. Foulkes: I am sorry. You are doing extremely well, Mr. Weatherill, and the hon. Member is doing equally well. The hon. Member seems to have been brainwashed by the CBI statement, which is not borne out by the facts, and also by the newspaper report that alleged that there was an upturn. I go back to my constituency every week to deal with more closures, more redundancies and more people on short time. What evidence does the hon. Gentleman have of even a glimmer of an upturn?

Mr. Horam: The evidence is in a patchy improvement in the profit and output of some companies. It is on a very small scale and is very insubstantial. It will not last long and will soon peter out.

Mr. Foulkes: rose—

Mr. Marlow: rose—

Mr. Horam: I shall not give way. Hon. Members on both sides of the Committee are well able to read the newspapers and consult their own constituents and companies in their own areas. They will have their own views. I am stating mine and I am confident that they are well supported by the evidence.

Mr. Marlow: rose—

Mr. Horam: The hon. Member for Northampton, North (Mr. Marlow) intervened three times during the

speech of the hon. Member for Blackburn. He is almost the sole representative of the Conservative party on the Government Benches, although he has now been joined by one or two colleagues. He is taking on too much responsibility for supporting the Government. I am sorry, but he must make his own speech. The hon. Gentleman seems to have subsided now.
I shall return to where I was before I was so rudely interrupted. There are small and insubstantial patches of light after four years of almost medieval gloom, but we shall soon be back in a dark era. There is plenty of evidence already, not merely that there is a certain amount of recovery but that the next recession is in sight. That points to the central conclusion that the Government have not brought about, even with all the inevitable small ups and downs and lifts from the bottom of the slope, a substantial and sustained recovery. There has been no permanent improvement in our industrial or economic performance. Nor have the Government broken into the inflationary cycle in a permanent way, which we need to do.
It is the view of both the Social Democratic and the Liberal parties that they will not do so. I believe that it is also the view of many Conservative Members. They will not do so until they take a different approach to what is traditionally called incomes policy. The Government have refused to go into that area. There will be no permanent improvement in inflation or expansion until we embark on sensible proposals there. It is right to say that the Government have no policy for expansion. They have a policy for bumping along the bottom and occasionally going up a little and down a little, but they have no real policy for sustained expansion that would bring new hope to the people.

Mr. Bruce-Gardyne: Before the hon. Gentleman embarks upon the wonders of his party's incomes policy, which we always listen to with enormous interest—I have been following his comments closely, which are the first that relate to the new clause—will he explain one thing? Is it his party's proposition that the £1,800 million that the Libera/Social Democratic new clause would cost in a full year should be recouped from additional taxation in other areas, and, if so, which? If it is not, how is it that forgoing that revenue and the consequential impact on the borrowing requirement would not lead to the rise in interest rates that he claims would follow as a consequence of higher wage settlements and higher profits later in the year?

Mr. Horam: I shall not only address the new clause closely but answer the Minister's intervention clearly. Our plan would not cost £1,800 million because it would run only from October.

Mr. Bruce-Gardyne: I said that that would be the cost of a full year.

Mr. Horam: The Minister referred to a full year, but we are talking about cutting VAT in October. That makes it a six-month period. Moreover, the true net cost to the public sector borrowing requirement is £550 million. That gives a more accurate picture. That is how the Treasury model operates and it is a perfectly defensible statement of the net PSBR cost.
The Minister also asked whether we proposed to match the cost, whatever it might be, with higher taxes or cuts


in public expenditure or whether it would be added to the PSBR. Our Budget makes it plain that it is to be added to the PSBR. As the Minister asked the question, I should be grateful if he would pay attention to the answer. We should not increase taxation or cut expansion. The cost would be a net increase in the PSBR.
I believe that that could be achieved without any net increase in interest rates because currently there is no funding problem for the PSBR. The market has not been asked to absorb large amounts of gilts in the past six months or so, and there have been very few rights issues in the past 12 to 18 months. Thus, there is a great deal of institutional money around to mop up any relatively small increase in the PSBR. Indexed gilts, which the Government brought forward with some dissent on their own side, have also helped with the funding of the PSBR. I am glad to see that the Minister agrees. Indeed, there is so little funding problem that the Government have been able to overfund in the past few months in order to massage the money supply figures. The argument that our desire to cut VAT in October would inevitably lead to higher interest rates therefore does not stand up to serious market examination.
In addition—the hon. Member for Blackburn put this rather well — a cut in VAT, whether to 13 per cent. from now as proposed by the Labour party or to 12·5 per cent. from October as we propose, is a good measure in its own terms. First, it will keep inflation down. We saw the powerful effect on inflation of a change in VAT in the reverse sense when the Government almost doubled VAT on coming to power, and they paid dearly for it. A cut in VAT would certainly have a powerful effect in the other direction. Secondly, the Financial Secretary told me that, expressed in terms of the standard rate of income tax, the increase in total tax burden as a result of the Government's measures has been about 7p in the pound. That is a massive extra burden, not just on the poor or the rich but on the average person. One reason for that was the near doubling of VAT in the Government's first Budget. In those terms, therefore, in addition to any economic reasons, it is right to cut VAT as soon as we reasonably can.
In an ideal world, we might not suggest a proposal in exactly these terms, announcing our intention to cut VAT several months in advance, but it is the only way in which we can make the point that in an Alliance Budget it would probably have been right in present circumstances to consider cutting VAT in the autumn. Clearly, this would depend on how the economy behaved between now and then. If the pound fell still further, we should be more inclined to make the cut. On the other hand, if oil prices collapsed without a depreciation in the pound to compensate, thus costing the Government a great deal of revenue, that would certainly have to be taken into account. Although I do not believe that interest rates would inevitably rise as a result of our proposal, the overall fiscal balance would have to be taken into account and I should certainly be concerned if oil prices moved dramatically between now and the autumn. I do not think that they will, but one can never rule out the possibility.
In all the circumstances, therefore, ours is a sensible measure designed both to keep any expansion going and to restrain inflation.
One particular issue has been brought to my attention today. Although we do not propose changes in VAT in specific areas, a cut to 12·5 per cent. would improve the position of the building industry especially. We know of

the anomaly whereby new building is exempt but repairs and maintenance are subject to the full rate of VAT. Sensible Members on both sides must concede that that is nonsense. Our new clause does not deal with that directly, but it would lead to a small improvement in the position of the building industry. As we said in our budget, however, the SDP and the Liberal party remain committed to introducing zero rating for building repair and maintenance at the earliest opportunity as a measure to help the building industry and to help the home owner who wishes to improve his own house. Nevertheless, the reduction in the general rate of VAT to 12·5 per cent. would bring some small and welcome relief in that area.
The main argument, however, as announced by the hon. Member for Blackburn and myself, is that direct action of this kind by Government on prices will substantially benefit the economy.

Mr. Marlow: As always, it is my role to try to be as helpful as possible to the House. Indeed, I was trying to help the hon. Member for Gateshead, West (Mr. Horam) when I sought to intervene in his speech. He was groping around for evidence of recovery in the economy. I believe that one of the few members of the hon. Gentleman's faction is a certain Mr. Harvey-Jones, who runs ICI—one of our largest companies. The hon. Member for Gateshead, West may or may not know that ICI has recently reported distinct evidence of recovery in the economy. As there are so few members in the hon. Gentleman's faction, I suggest that he get together with that distinguished member so as to brief himself more properly on the subject.
I can reassure the hon. Member for Blackburn (Mr. Straw). He was keen to have the attention of Ministers, so I should be grateful to have his attention now. Indeed, I can give him pleasure and perhaps even surprise him. I am a firm and convinced supporter of the Government's budgetary and economic policy. What I am about to say may not be precisely in line with what the Government are doing, but that is not entirely due to the Government's economic policy. It is certainly not the fault of my hon. Friend the Economic Secretary to the Treasury and it has very little to do with my right hon. and learned Friend the Chancellor. Other extraneous bodies restrict and restrain the Government in these matters.

Mr. Foulkes: The movements of the planets, perhaps?

Mr. Marlow: I am against new clause 1 because I do not think that it is strong enough or radical enough. I do not wish to reduce VAT by 2 per cent.: I want to do away with the whole rotten tax.

Mr. Foulkes: On a point of order, Mr. Weatherill. I cannot find the hon. Gentleman's new clause on the Order Paper.

Mr. Bruce-Gardyne: It has a damned sight more to do with this debate than what the hon. Member for Blackburn (Mr. Straw) said.

Mr. Foulkes: I understood that the hon. Gentleman was introducing a new clause to reduce VAT to zero, but I cannot see it on the Order Paper.

The Chairman: I do not think that it is on the Order Paper either. The hon. Member for Northampton, North (Mr. Marlow) was reflecting upon new clause 1 and saying that he does not think that it goes far enough.

Mr. Marlow: My point is that I should like to support new clause 1 but that, sadly, it does not go far enough. I am about to give my reasons. Like my hon. Friend the Minister, I am in favour of a relatively large burden of taxation being levied through indirect taxation rather than direct taxation. I feel that a value added tax that is reduced by only 2 per cent. to 13 per cent., is the wrong means of raising the bulk of our indirect taxation. As to new clause 5, I do not wish to be discourteous but, as my right hon. Friend the Prime Minister said yesterday, a two-headed monster has recently emerged. The kindest and best thing to do is to ignore it and anything that it does.
Napoleon once said that we are, were, or were about to become, a nation of shopkeepers. He might have been trying to make us a nation of shopkeepers or he might have believed that we were. We were not and did not become one. Where Napoleon failed, the bureaucrats of Brussels have succeeded. While we are not precisely a nation of shopkeepers we are a nation of tax gatherers.
Perhaps we should go back to the good old days. We all like to look back to our innocent youth when we were carefree and times were better. In some respects, times were better. In those days, we had purchase tax, which had many advantages over VAT reduced to 13 per cent. One of the advantages of purchase tax was the possibility of having differential rates. A more luxurious item could attract a higher rate of purchase tax than others. In that way, we were rightly able to protect our poorer citizens.
Another advantage of purchase tax as against VAT at 13 per cent. is that there was a lower level of political sensitivity to change the rate of purchase tax. If the hon. Member for Blackburn were to reduce VAT by 2 per cent., it would automatically be reflected in all sorts of other indices which would have a concomitant effect on public perception of Government economic policy, what was likely to happen to interest rates and so forth. Above all, Mr. Deputy Speaker, the big advantage—

The Chairman: Order. We are in Committee.

Mr. Marlow: I am most apologetic, Mr. Weatherill.
There is also the problem of administration. I do not believe that anyone has stood back and examined the vast administrative burden that we put upon our people by this monstrous tax—value added tax. At the moment, there are 1·4 million VAT accounts. That does not mean that 1,400,000 people are involved in working on VAT—Customs and Excise also works on it. For each account, there might be one, two, three or, in bigger firms, 10 or 20 people working on it. If one adds all that up, one will probably find that there are as many people who work on, are involved in or are troubled or pestered by VAT as the entire population of England at the time of Napoleon. Where Napoleon failed, the Brussels bureaucrats have succeeded. We are a nation of tax gatherers.
There are 500,000 VAT accounts under the relatively minute level of £50,000 a year turnover. We call it value added tax but we are not taxing people on a threshold of value added; we are taxing them on a threshold of turnover. Perhaps it would be sensible if people were taxed on a threshold of value added. What is a turnover of £50,000 a year up to which 500,000 accounts are involved and, no doubt, on which perhaps 1·5 million people are employed? What does a turnover of £50,000 a year mean in terms of a business? Such a business employs three people at the most. If it were engaged in selling used cars,

the turnover would be a maximum of two cars a month. That is nothing. It is hardly enough to make a living on, yet there are a vast number of accounts at that level.
Perhaps the hon. Member for Blackburn, who wants to reduce VAT by 2 per cent., would have done better to abolish it altogether. If he had not thought of abolishing it altogether, he might have been wiser to tackle the problem of the threshold. What heaven on earth it would have been for many of our citizens if he had advanced that proposition and the House, in its good sense, had agreed with him and allowed it to happen. If the threshold were raised to £20,000, we should be taking six—

The Chairman: Order. The hon. Gentleman is now going very wide of the new clause. Will he please stick to what is on the Order Paper?

Mr. Marlow: Of course, Mr. Weatherill. The hon. Member for Blackburn wants to abate the burden of VAT on the economy in various ways. One way in which to do that is to abate the massive burden that it currently puts on people who are involved in industry, business and manufacturing and are trying to boost the economy out of the recession.

The Chairman: Order. With great respect to the hon. Gentleman, that may be so but it is not what the new clause says.

Mr. Marlow: To reduce that massive burden on the people the Government could follow the hon. Member for Blackburn. They should then have to raise other forms of taxation. Alternatively, they could reduce the burden through the VAT system by raising the threshold. They would then have to increase other taxes to balance it. The Government's budgetary sums are right. I agree with and appreciate them. What heaven it would be if some of that burden were reduced. My hon. Friend, a sensible, honourable and compassionate man, wants to do things that will benefit the nation. He would dearly love to do that but, sadly, it cannot be done.
I do not know how many hon. Members realise it, but when asked whether my hon. Friend could increase the threshold of VAT, he answered that article 24(2)(c) of the EC sixth directive on VAT restricted the increase in the registration exemption limit to those which maintained its value in real terms. Although the hon. Member for Blackburn might want to reduce the level of VAT should he wish instead to increase the threshold he will find that he cannot do it. We are not allowed to do it and have not the power to do so, as it belongs to someone else. We are submerged under a foreign institution.

The Chairman: Order. I am terribly sorry to interrupt the hon. Gentleman again but what he is saying has absolutely nothing to do with the new clause. He may well be right, but it is a matter for another debate.

Mr. Marlow: All that I can say, to sum up my point, is that the hon. Member for Blackburn has the wrong new clause, as it goes in the wrong direction. Had he tackled the problem in a different way, which was allied to Britain's sovereignty and our ability to raise and control our own levels of taxation, he would have achieved far more agreement in the House. Sadly, he has the wrong new clause and I must vote against it.

Mr. David Ennals: The Minister must be disappointed that only one Conservative Back


Bencher is present, apart from the Parliamentary Private Secretary behind him, and that he has received such monumental support for his stance on VAT.
The hon. Members for Northampton, North (Mr. Marlow) and Gateshead, West (Mr. Horam) criticised new clause 1 only because it does not go far enough. The hon. Member for Northampton, North said that VAT should be reduced by another 13 per cent. and the hon. Member for Gateshead, West said that it should be reduced by another 0·5 per cent. I agree with the hon. Member for Gateshead, West that all the pressure for an early general election, which now seems to be on the Prime Minister, arises from the Conservative party's fear of circumstances in the autumn. The cut and run argument is powerful. I should be happy to have an election now, but it would be called because of the Government's fears not only that inflation will increase but that there are no convincing signs, except some patches here and there, of the end of the recession.
I fully support the new clause. The Chancellor's decision to increase VAT from 8 per cent. to 15 per cent. was not only an open betrayal of an election pledge, but the greatest single impetus to inflation in 1979. It increased the cost of living immediately by 4 per cent. The high inflation caused by the Government of more than 22 per cent. began their battle against inflation, which caused massive damage to our industrial base and to employment. Unemployment in Britain is now almost the highest in Europe, and it will become higher. The Chancellor made an appalling mistake in introducing 15 per cent. VAT in his first Budget, and I am glad that my right hon. and hon. Friends have tried to lower the figure. As my hon. Friend the Member for Blackburn (Mr. Straw) said, instead of a decrease in public taxation, there has been a massive increase, except upon the very rich, who represent only a small proportion of the community.
The effect of VAT on charities has aroused great concern on both sides of the Committee, and I am surprised that no Conservative Member is here to say something on behalf of charities. I have proposed—I hope that it will appear under another name in Standing Committee—

Mr. Marlow: On a point of order, Mr. Weatherill. If it is not proper on this new clause to talk about thresholds, is it proper to talk about charities?

The Chairman: I think that we must not have a tit-for-tat on this matter. I listened carefully to what the right hon. Member for Norwich, North (Mr. Ennals) said, and I believe that he is sticking to the new clause.

Mr. Ennals: My point is directly related to the new clause. Charities perform an invaluable service that fits in with the theses of both the Government and the Opposition. They have taken on vast responsibilities in social services. They provide services such as homes for the elderly, the mentally handicapped and children, which would be excluded from VAT if they were provided by local authorities. It is grossly immoral that VAT is imposed on charities. This is relevant to the new clause because any reduction in VAT would give some relief to charities. Even if my right hon. and hon. Friends were proposing only a 0·5 per cent. cut, it would be some help, but year after year the Chancellor, when pressed about this matter, has said that there are problems in the definition of charities. I have a simple definition. When services are provided to the public by a charitable organisation that

might otherwise be provided by a local authority social services department, all VAT paid by the charitable organisation should be refunded. That proposition may not be accepted in Standing Committee, but the bodies that may benefit from my proposition or from the new clause include the Spastics Society, Dr. Barnardo's, Help the Aged, the National Society for Mentally Handicapped Children and Adults, the National Children's Home, the Royal National Institute for the Blind, the Royal National Institute for the Deaf and the Save the Children Fund. More than 100 charities, often staffed by volunteers, which provide invaluable service to help to meet the social needs that the Government have, sadly, neglected would benefit from the clause.
5.45 pm
The cost of my proposals for charities would be relatively small—about £1 million to £2 million—but already some charities have had to cut their services to the most needy in our society. It is deplorable that the Government have not stopped the removal of 15 per cent. of funds donated by the public to charities, which goes straight into the Exchequer's coffers.

Mr. Bruce-Gardyne: No, it does not.

Mr. Ennals: It does. If the Government will not completely relieve charities from VAT, at least this new clause will provide modest relief. If there was any political will to ease the burden of taxes, it would be done. The political will has been found to relieve the burden of VAT—

Mr. Bruce-Gardyne: That is a lot of rot.

Mr. Ennals: The hon. Gentleman is making comments from a sedentary position. Why does he not stand up to make them?

Mr. Bruce-Gardyne: Why was that not done between 1974 and 1979?

Mr. Ennals: During that period VAT was at 8 per cent., but this Government have almost doubled VAT. They have not only departed completely from the pledges that they made before the general election, but they have dramatically increased the effect of VAT on charities. The Government had the will to announce that private firms tendering to provide services in the National Health Service would be relieved of VAT so that they could make profits, but they have not done so for voluntary organisations. That is doubly immoral.
The Government should consider some important commodities that should not carry the burden of 15 per cent. VAT. They are presiding over a period of massively increasing crime, especially burglaries, so locks and equipment that would discourage burglars from breaking in should be excluded from VAT—

The Chairman: Order. I am sorry to interrupt the right hon. Gentleman, but the Committee expects me to be fair to both sides. We must not call upon the Government to reduce VAT on some items, because the new clause states that it should be reduced from 15 per cent. to 13 per cent, on everything.

Mr. Ennals: I accept your ruling, Mr. Weatherill. The Government will have heard what I said and, in view of the tribute paid by the hon. Member for Northampton,


North (Mr. Marlow) to the sensibility, wisdom, justice and morality of the Minister, no doubt he will consider law and order as well as charities.
The new clause would be of some help to the Government, who have broken many of their election promises. It would be a modest step towards giving credibility to what they say they will do in their next general election manifesto. So many of the promises that appeared in the Conservative party's 1979 manifesto have been broken, but if the Government eased their position and accepted the new clause, some members of the electorate would believe one or two of their statements in future. It would be in their own interests, apart from the interests of the country, to accept the new clause.

Mr. Foulkes: I know that the Economic Secretary to the Treasury welcomes the opportunity to fulfil pledges and to do what he said he would do. I know that he is always pleased to honour commitments, and the new clause gives the Government the opportunity to honour an election commitment. If they agree to accept the new clause, they will reduce tax for those who really need a reduction to take place.
Unlike my hon. Friend the Member for Blackburn (Mr. Straw), the hon. Member for Gateshead, West (Mr. Horam) and others who have participated in the debate, I am not a tax expert. I speak as an ordinary taxpayer—

Mr. Bruce-Gardyne: A very, very ordinary taxpayer.

Mr. Foulkes: —who talks regularly with other ordinary taxpayers. When they see me they say, "George" —they are a friendly lot—"which taxes have been cut? The Tories told us way back in April 1979 that our taxes would be cut. Please tell me which taxes have been cut."I tell them that although I do not wish to be political on the issue I can honestly say that no taxes have been cut for ordinary people. That is the truth.
The introduction of the new clause offers the Government salvation. That is an argument, perhaps, for the Opposition not to support it. If the Government accepted the new clause and it were added to the Finance Bill and enacted, they would be able to say that a tax cut had been made. Acceptance of the clause would lead to a tax cut that would help the ordinary people whom I represent, as well as those represented by, for example, my hon. Friends the Members for Glasgow, Provan (Mr. Brown) and Fife, Central (Mr. Hamilton).
I note that the hon. Member for Croydon, South (Sir W. Clark) has entered the Chamber. He is an old sparring partner of mine in Committee on Finance Bills. He will recall the article that appeared in The Times entitled
The Case for Cutting VAT.
That article set out the effects of cutting VAT and how they would help ordinary people. It claimed that cutting VAT from 15 per cent. to 10 per cent. — a slightly greater cut than we are suggesting—would reduce prices by about 3 per cent. That would be a substantial reduction.
The Government have an alleged commitment to reduce taxes, and they also want to reduce prices. The hon. Member for Gateshead, West said that the inflation rate will be increasing if things continue as they are. The new clause presents an ideal opportunity to keep down inflation. The article in The Times claimed that to cut VAT would be to increase output. It calculated that a cut from

15 per cent. to 10 per cent. would increase output by about 1 per cent., and we desperately need an increase in output. It was argued in the article that whereas a cut in income tax might result in more saving and less spending, a cut in VAT would result in more spending and would therefore help to reduce unemployment. Again, that is something that the Government need desperately.
All these arguments bear directly on the new clause. It seems clear that the effect of the new clause would be to help the economic situation and, above all, those whom we represent. Statistics show that the burden of VAT falls disproportionately more on the lower quintiles. Ordinary working people find the effect of value added tax much greater than Conservative Members and those whom they represent.
Value added tax is a regressive tax that affects pensioners substantially more than the majority of those whom Conservative Members represent. The Government have already clobbered pensioners enough. There have been clawbacks and the pensioners' year has been increased from 52 weeks to 54 weeks to enable the Government to take money away from them. The removal of the link with earnings was another means of clawing back money from the pensioners. The effect of the Government's latest proposal is a clawback of a further 2 per cent. A reduction in VAT would be of especial benefit to pensioners.
The clause would give the Government an opportunity to fulfil a promise. As they have fulfilled few if any promises, they should accept the new clause with both hands. It gives them an opportunity to introduce a tax cut that would help ordinary working people, pensioners and the poor generally. These are the people who have not benefited from any tax changes that the Government have introduced. Those at the top end of the earnings scale have been the only people to benefit from the Tories' tax cuts.
The new clause is positive and progressive and has been extremely well argued by my right hon. and hon. Friends on behalf of economists and tax experts, those who understand macroeconomics. I speak on behalf of ordinary taxpayers, and I know that it is a new clause that would be welcomed by them.

Mr. Carter-Jones: I am in a dilemma because I do not know how to vote on the new clause. I am prepared to support 15 per cent., but I think that I would have benefited from hearing the Minister's contribution before making my speech. Representations have been made to the Economic Secretary to the Treasury on zero rating for charities. The voting pattern of hon. Members would be affected — whether the rate be 15 per cent., 13 per cent., or 12·5 per cent.—if zero rating concessions were made. If those concessions were made for charities, the hon. Gentleman might find himself in a position very different from that which is likely to result.
I note that the payroll vote outnumbers those on the Conservative Back Benches. However, 89 Conservative Members signed an early-day motion calling for VAT relief for charities. The motion states:
This House knows that in 1972 the then Chancellor of the Exchequer gave a commitment"—

Sir William Clark: What has this to do with the new clause?

Mr. Carter-Jones: It has everything to do with the new clause.

The Chairman: Order. The hon. Member knows that the rate of VAT paid by charities is to be debated in Standing Committee. I invite him to address his remarks to new clause 1, which calls for a reduction of VAT from 15 per cent. to 13 per cent.

Mr. Carter-Jones: I can assure you, Mr. Weatherill, that there are Opposition Members who would stay with the Government if a statement were made on the Government's policy for charities. This is the dilemma that we face. I suppose that the Minister's silence is my answer. A reduction to 13 per cent. or 12·5 per cent. would be extremely helpful. I know that the difficulty of providing relief is used as an argument for the Government being unable to introduce zero rating. Hon. Members have been told how difficult the position is. The hon. Member for Croydon, South and I attended a meeting at which he said how difficult the position was. It is difficult to stand in a railway station, a tube station or a shopping precinct, holding out a bag for charity knowing full well that 15p in every pound goes to the Treasury. If the rate is reduced to 12·5 per cent. the position would be more satisfactory. Money would be put into the pockets of charities.

6 pm

Mr. Bruce-Gardyne: As the hon. Member for Eccles (Mr. Carter-Jones) is repeating something that the right hon. Member for Norwich, North (Mr. Ennals) incorrectly stated, I must correct him. There is no VAT on gifts to charities. I trust that he knows enough not to spread around that type of canard, which is without foundation.

Mr. Carter-Jones: If an individual has 10 wheelchairs he does not pay VAT on them, but if a charity bought a wheelchair to be shared by 10 people, VAT is payable on it.

Mr. Bruce-Gardyne: That is not the same point.

Mr. Carter-Jones: It is the same point. When a collection is made, it is made for the relevant organisation.

Mr. Bruce-Gardyne: VAT is not paid on the collection.

Mr. Carter-Jones: VAT is paid on the collection.

Mr. Ioan Evans: Is it not correct that for every pound that a charity spends it has to spend 15p extra because of the tax imposed by the Government? If people wish a charity to spend a pound, they should give it £1·15.

Mr. Carter-Jones: Precisely. I do not understand why that fact is not realised. It is hard for someone who runs a coffee morning because 15 per cent. is lost from the proceeds.
Those who raise money encounter difficulties. The Treasury have the ability to find a solution to the problem. That fact will condition the way Members will vote. Eighty-nine Conservative Members supported the early-day motion. If the payroll vote were removed and hon. Members voted according to their intentions and priorities — present in the Chamber are hon. Members who signed that early-day motion—the 12·5 per cent. rate would be carried tonight. That is the key to the position. It is interesting to note that people who belong to charities have become adopted Conservative candidates. They have fought the Government on this issue and will have to face it again.
Will the Economic Secretary, when replying, if he can negotiate the rules of procedure, state his attitude towards this policy because it may well influence the voting pattern?

Miss Jo Richardson: I welcome the move that the Labour party has made towards reducing the rate of value added tax, but I wish that we could have had some zero-rated items as a preface to rethinking the position of indirect taxation. Reducing the rate from 15 per cent. to that proposed in new clause 1 would greatly assist pensioners and one-parent families, who. are the poor members of our community. They are overlooked in terms of what they have to fork out.
Women pay 15 per cent. VAT on sanitary products and they would welcome a reduction in the rate. They have been campaigning, as have many male and female Members, for a substantial reduction in value added tax, if not for its abolition. I remember the 1979 Budget when value added tax was raised from 8 per cent. to 15 per cent. Outrage was expressed not only by hon. Members but by the public at the thought of the increase in the cost of living, especially on essential items, such as the one I have mentioned. The Treasury in previous discussions on this subject has acknowledged that sanitary products are essential for personal hygiene. I have a letter from the previous Economic Secretary to the Treasury stating that fact. However, there are many "buts" after that. The letter goes on to say that many other products are essential. The famous incident of razor blades for beards has been raised. Almost every hon. Member in the Chamber has used a razor this morning. An exception is the hon. Member for Croydon, North-West (Mr. Pitt) who does not consider razors to be absolutely essential for personal hygiene.

Mr. Robert Sheldon: He would be better looking if he did.

Miss Richardson: This is a serious matter for women and it varies from woman to woman. Prices vary. One chemist will charge 50p for 10 tampons or 10 sanitary pads whereas another store, perhaps in a village, will charge as much as £1 for the same product. I am, in a way, criticising the profiteering that arises from the pricing of sanitary products as a result of this horrendous tax.
Women's needs vary. Some women in some months are able to use only one packet of sanitary towels. I am sure that I am telling hon. Members what they already know from their own family circumstances. Occasions exist when women need more than one packet. In some months they have to spend more money because they need two or three packets. A woman contacted me recently who had a menopausal problem. During her periods in one month she was using two packets a day.
Others are affected by the level of tax on this product, such as people who are incontinent. Nappies are free from VAT, and it is quite ludicrous that VAT is not excluded from the other products I have mentioned.
I welcome the fact that the Labour party is proposing that VAT should be reduced by a couple of percentage points. Magazines such as Mother, Woman, and prestigious bodies such as the National Federation of Women's Institutes and the National Housewives Association, have supported this move. Those organisations are not normally considered outrageous feminist bodies, but they involve women who are very concerned for their sisters. I cannot wait for a general election and


the reinstatement of a Labour Government. In our document we propose to abolish VAT on sanitary products and I am sure that that will be well received by women.
My right hon. Friend the Member for Norwich, North (Mr. Ennals) listed organisations that are constantly battering down our doors because they rightly want relief from VAT. In my constituency a charitable organisation, Abbeyfield, builds and furnishes homes for the elderly. There are two homes in Barking and the organisation is furnishing a third home, which will be greatly welcomed because of the facilities that it will offer to those elderly who need some overseeing and care.
It is slightly ironic that if—as I understand it — a local authority furnishes one of its homes, it does not have to pay VAT, while a voluntary or charitable body has to do so. It is particularly ironic that this Government, who pretend to be on the side of voluntary work and who rightly praise such work, apparently do not want to encourage it by reducing VAT for charitable organisations. As we all know, cuts have been made in local authority and social service spending and that places an even greater burden on charitable organisations. Consequently, it is ironic and cynical that the Government should refuse to help charitable organisations to do the job that the Government have suggested is theirs.

Mr. William Pitt: I associate myself with the remarks made by the hon. Member for Barking (Miss Richardson) about sanitary products for women. I was rather shocked to notice the discomfort of some Conservative Members. If they consulted their wives and daughters they would realise the dilemma faced by many women. It is about time that something was done.
It would be out of order to discuss zero rating, because we are discussing a reduction in VAT which will, in turn, reduce inflation. However, a discussion on zero rating would be helpful, and I echo the remarks made by the hon. Member for Eccles (Mr. Carter-Jones) in seeking some response from the Minister. New clause 5 has been tabled by Social Democratic and Liberal Members. The reduction of VAT to 12·5 per cent. would have a significant effect, but it would be wrong, for several reasons, to introduce a cut in VAT before 1 October 1983. For example, the effect of the devalued pound will not come through before then, and the new pay rounds will be starting. According to the Treasury model, if we reduce VAT by 2·5 per cent., we can reduce inflation by about 1 per cent.
In February 1983 the OECD produced figures that enable us to compare inflation rates with unemployment rates in the big five economies: the United Kingdom, Canada, the United States of America, Japan and Germany. They show that Britain has the highest unemployment rate, at 13·5 per cent. and the third highest rate of inflation. The hon. Member for Northampton, North (Mr. Marlow), who is not in his place, asked about France. Its inflation rate is the highest, at 9.2 per cent., but unemployment is only 8 per cent. That says something about the Government's attack on the economy. By screwing down inflation, the Government have greatly increased unemployment in Britain.
Earlier, we discussed the effect of VAT on certain industries. I am sure that many hon. Members have

received the letter from the National Federation of Building Trades Employers. The statistics show that about one in eight of those unemployed are associated in one way or another with the building industry. The NFBTE states:
The English House Condition Survey emphasised the serious problem of housing deterioration which exists and the continued positive rating of building repairs and maintenance means that the 'cowboy' has a definite advantage over the bona fide builder.
If a man offers to do the roof or the garage for cash in hand and says, "You give me the money, no questions asked," the customer has no protection or guarantee that the work will be done, let alone done properly. I echo the sentiments of the NFBTE in its plea for zero rating, but a reduction in VAT would certainly help the building repairs industry. It is a stupid anomaly that new build does not incur VAT but repairs do. I should welcome some Government assurance about that.
Any reduction in the rate of VAT would be positive. Conservative Members cannot deny that when they came to power they almost doubled the rate. It went up by a factor of about 1·9, which is as near to two as makes no odds.

Sir William Clark: rose—

Mr. Pitt: A reduction in VAT would reduce inflation, would give an impetus to the economy — which the Government always claim to desire—and would also assist those most affected by VAT; those in the fifth quintile.

Mr. D. N. Campbell-Savours: On 23 April 1979, the former Prime Minister, my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) said that the Tories would double VAT to pay for income tax cuts. They had done so by 12 June, despite the denials of the Prime Minister and a scurrilous article run by one of the daily newspapers, entitled "Labour's Dirty Dozen".

Sir William Clark: Perhaps we should get the facts right before the debate continues. When the Conservative party came to office VAT had two rates, at 8 per cent. and 12 per cent. Both were amalgamated into 15 per cent. Therefore, it is quite wrong of the hon. Members for Wokington (Mr. Campbell-Savours) and Croydon, North-West (Mr. Pitt) to suggest that VAT nearly doubled. The 8 per cent. rate may have nearly doubled, but the 12 per cent. rate increased by only three points.

Mr. Campbell-Savours: The hon. Gentleman would do well to recall that the 12·5 per cent. rate represented a very small proportion of the total yield. The great majority of tax was levied at 8 per cent. That figure was nearly doubled. Twice eight is 16 and the rate is 15 per cent.
I shall argue that a 2·5 per cent. cut will not lead to a reduction in the take if the Government pursue a certain course. Instead of examining collection arrangements and stamping out evasion to increase the take, the Government have used the crude tool of doubling the rate and have thus triggered off a massive exercise in tax evasion not only of VAT, but also of income taxes. The problem is that higher VAT rates act as a disincentive to compliance with the law. Furthermore, it has a spin-off effect on income tax receipts, because to keep records for VAT invites the attention of the Inland Revenue. Some say that there is an incentive to register, if only to offset a trader's payment


of VAT. However, that is not true because many traders believe that it is better not to register but to pay VAT on purchases and avoid contact with the state.
Raising the VAT threshold in many ways further aggravates the problem, as it serves to legitimise the failure to register and the consequential failure to make genuine returns to the Inland Revenue. Raising the VAT threshold has enabled many to earn higher salaries without having to declare them to the Inland Revenue because they have not been monitored by any department.
Evasion is not exclusively practised by the unregistered — it is also practised by the registered. Businesses providing services do this, and we see many examples in advertisements in local newspapers. When one contacts these so-called skilled people and they come to one's house to carry out a job—this has happened to me—their first question is whether one is paying cash, as one will otherwise have to pay the VAT. It is becoming standard practice by thousands of tradespeople to pursue such arrangements when they seek payment. We all know that that is the truth, and a higher rate of VAT further aggravates the problem. A lower rate acts as an incentive to end that.
My hon. Friend the Member for Fife, Central (Mr. Hamilton) and I are members of the Public Accounts Committee. One can imagine our pleasure when last week we had the opportunity to examine the chairman of the Board of Customs and Excise, Mr. Fraser, and the director of organisation, Mrs. Strachan. Having checked that I am in order, I shall quote from the evidence that they gave to the Select Committee, which has been published, and which relates directly to the point that I am making. When asked a question about the level of undetected under-declarations, which would be reduced if we reduced the rate to 12·5 per cent., Mrs. Strachan replied:
What is noticeable is that the rate of under-declaration being discovered by our control staff has been going up quite substantially and the likely figure for the year ending March 1983 is very substantially up on the year previously. If one looks at that it suggests that the cost effectiveness of VAT control staff is up quite substantially compared with what it was before, whereas for the year ending 31 March 1982 we were getting something like £44,500 per control officer, for the year ending 31 March 1983 it was £87,300 per control officer.
She went on to express reservations on certain aspects of the figures that she has quoted. She shows that it is an efficient use of resources to spend money on more control officers, thereby increasing the take, which would have the effect that I have explained.
When Mr. Fraser was asked about staffing, and how that affected the take on VAT, he said:
Clearly the allocation of staff to the Civil Service as a whole is a political judgment.
He went on to deal with the present arrangement and said:
if we want more control staff for VAT we can try to find savings in other areas of VAT, the non visiting area; or we can look at the Customs and Excise bits of the Department or the support services and try to find savings there to release the VAT; if neither those work and we still think we need more staff we can ask for more staff.
At that point, the Chairman of the Committee asked what the effect would be if the Customs and Excise were to be given more staff. He asked:
Are you saying that you could not use more staff at the moment?
The reply came from Mr. Fraser on the behalf of his department:
We should be very glad to have more staff.
The Chairman then asked:

Could you use them more profitably?
Mr. Fraser replied:
We would undertake to employ them profitably.
In the event that the requirements of the Customs and Excise officers were to be recognised by the Government and the staff allocated, there would be a substantial increase in the VAT take, perhaps sufficient to offset the cost of the 2·5 per cent. reduction in VAT outlined in the new clause.
In connection with the reference to the Customs and Excise department and the suggestion that the staff could be drawn from it, it might be worth considering British ports. Dover is perhaps the best example. Customs and VAT control officers have three responsibilities. They must monitor imports, which include commercial consignments, with landing officers. They have a responsibility for dealing with private importations, on which, again, VAT payments are made. Thirdly, of no relevance to the debate, they have a responsibility for export documentation.
Things have deteriorated so much at ports that the customs officers union, and others who have a responsibility for the collection of VAT, have accused the Government of allowing the United Kingdom to become a free port for heroin. I know that that point is clearly out of order today, but it should be formally noted. It is an illustration of the problems of monitoring imports and procedures for the collection of VAT. That is why the customs officers have used that analysis.
The unions have considered industrial action in the ports because of the reduction in manning, and there were even stories in the press last weekend that control and Customs and Excise officers at Dover would take industrial action and withdraw all services by the coming weekend. It is only in the past week that meetings have ensured that those actions will not be taken, pending consultation and discussion between unions and management. The Society of Civil and Public Servants, represented by Judy MacNight, has said:
The department reached a stage some time ago when it began to fail to administer proper controls.
The department responsible for collecting the moneys that we are discussing has lost 3,100 jobs since 1979. Another 500 jobs are due to go this year and more will continue to go up to 1988. The unions, recognising the downturn in tax takes, are demanding 1,000 more staff, but there has been no response from the Government.
In a recent incident, a solitary customs officer faced a queue of 300 to 400 vehicles at Dover, and in desperation just waved them through because he could not monitor the vehicles as he should have done if he were carrying out his responsibilities properly. On that occasion, there was a VAT loss that could have helped to offset the reduction in VAT being sought in the new clause. On Sundays in Dover it is reported that individual officers have to deal with as many as 40 or 50 coaches, which come into the United Kingdom unchallenged. These are unparalleled developments which demand a response from the Government.
The Economic Secretary has the right to reply if he catches your eye, Mr. Weatherill. He might consider in the meantime that at London Heathrow passenger traffic has increased by 67 per cent in the past 10 years. Cargo traffic, on which VAT could be due if clearance took place at the port and not at the place of import, has increased by 44 per cent. in 10 years, but there has been a 22 per cent.


reduction in the number of officers available for carrying out the monitoring and customs procedures. That is disgraceful.
6.30 pm
At Heathrow one person in 100 is challenged at the customs point—again showing a loss of VAT. Less than 2 per cent. of cargo is examined, but only four years ago that figure was 10 per cent. To fund their cuts in the Civil Service, the Government have reduced by four fifths the examination of goods entering the United Kingdom through Heathrow.
The cuts have meant a slacker regime and a lower return to the public purse. The new clause is about the public purse and I submit that if VAT were reduced to 12·5 per cent., accompanied by proper monitoring arrangements and sufficient civil servants, there would be no reduction in revenue. I am also told that yachts are now freely allowed into and out of British ports, often without customs monitoring. To return to the subject that was slightly out of order before, the price of heroin in Britain is now 30 per cent. less than it was two years ago. That means a lot. It means that supply has increased and that can only happen because there has been a reduction in the number of officers available.
Collection in the United Kingdom is becoming slack and shoddy, just as it is in Italy and some other EC countries where evasion is rife. It is not in keeping with the British character to conduct our affairs in such a way, but the Government have opened the door to this form of massive evasion.
There was a report the other day that the Italian foreign minister, Signor Colombo, had asked for the 1 per cent. VAT contribution to EC funds to be doubled. We are told that the reason for that application is that they are trying to earmark more of our overpayment for EC purposes. I put it to the House that that is a stab in the back for the convergence policy which I am told the Prime Minister has been pursuing over the past few years. I hope that the Minister will reply to that point.

Mr. Ioan Evans: It is interesting to record that, although every Labour Member who has spoken in the debate so far has supported the new clause, the only contribution from a Conservative Member was that of the hon. Member for Northampton, North (Mr. Marlow), who thought that the new clause did not go far enough. There is not a single supporter tonight of the Government's VAT policy.
This debate is about the Government's taxation policies. They would not have been elected four years ago if it were not for their promise to reduce taxation. Yet we all know what they have done to direct taxation. The personal tax burden has risen for every person earning less than £550 a week. Everybody in Britain who is earning less than that is paying more direct taxation than he was under the last Labour Government. The average family on average earnings of £160 is paying £7·95 a week more in direct tax than they were under the last Labour Government. But those earning £50,000 a year are paying £24 a week less.
This debate is not about direct taxation, but the case has been proved that the Government have broken their

promise to reduce direct taxation and it has been increased. I shall give way to any hon. Member who says that the Government have not increased taxation.
This debate is about indirect taxation. Labour Members would prefer a tax on earnings rather than on spending, but VAT is a tax on spending.

Sir William Clark: We do not.

Mr. Evans: But the Government have imposed taxation on both.
At the last general election there were strong denials from the Conservative party when Labour Members said that a Tory Government would increase VAT. Senior members of the Tory party said that they would not increase VAT. The evidence is there, although I do not have the quotes before me now. There was a famous article in the Daily Mail, which has already been referred to, which said that a Tory Government, if elected, had no intention of increasing VAT and that what the Labour party said was a lie. The Minister shakes his head, but he knows that the Daily Mail said that it was a lie for Labour to suggest that a Tory Government would increase VAT, but they have. They have increased VAT from 8 to 15 per cent.
The Minister made the technical point that VAT on luxury goods is 12 per cent., but that is not the case for a whole range of products in Britain today. On a car valued at £4,000—a lot dearer now than under the last Labour Government—VAT under the last Labour Government was £320 — a substantial amount — but under this Government it has risen to £600. On such a car, a person must pay £280 more in tax under this Government. Under the last Labour Government there was a tax of £24 on a television set worth £300. Under this Government, one must pay £21 more in tax on that television set—a total of £345.

Sir William Clark: Does the hon. Gentleman realise that the Daily Mail did not write the last Tory manifesto? It was made perfectly clear in our manifesto and election addresses that the emphasis was on taxation on spending rather than on taxation on earnings.

Mr. Evans: The Tory party made categoric statements that it would not double VAT. The Government have increased not only income tax but indirect taxation as well.
I do not want to give a catalogue of the whole range of products that have been affected under the Government, but every time people go shopping, with the exception of children's clothing and certain other items, they are paying more tax on their purchases. Another example is petrol. Under the last Labour Government a gallon of petrol cost about 73p. If we are to have an election in June people should remember as they go along to their polling station in their car that under this Government the regular price of petrol has risen to £179·1p. There is all the talk of competition, but wherever one goes the price is £179·1p. Taxation on petrol under this Government is about 98p a gallon. It is not just the petrol companies that put the price up; it is the Government. VAT must be paid on petrol, on cars and on car repairs.
It is right that we should reduce VAT, but I hope that the next Labour Government will go further, because I genuinely believe that it is those with the greatest incomes who should pay the most tax.
The Government have created unemployment for 4 million people. The unemployed may have thought that at


least they would not have to pay income tax because they earned nothing, but every time that they purchase goods they have to pay VAT. This Government have got at the unemployed, the pensioners and the disabled. They do not tax them on their incomes because that is insufficient, but they tax them on their spending.
VAT is a Common Market tax. It has been imposed nationally because it is part of the harmonisation within the EC. We should not blame the Italians for talking about increases in VAT, because a document circulated by the Commission states specifically that because Community finances are in such a state revenue must be increased. They hope to do that by increasing VAT.
Before the next election the Tories must deny or confirm whether they plan to increase VAT still further, even though they have already increased it from 8 per cent. to 15 per cent. If they are re-elected, what will the VAT rate be? I hope that they will not be re-elected, and that the people, in their wisdom, will recall the broken promises, throw out the Government and bring in a new party which will look after their interests.

Mr. Bruce-Gardyne: When I listened to the hon. Member for Blackburn (Mr. Straw) I wondered whether I was here on the right day. Eventually he said about half a dozen words on the subject of the new clauses. Other contributions were more closely related to the new clauses and I shall deal with them first.
The right hon. Member for Norwich, North (Mr. Enna1s), the hon. Member for Barking (Miss Richardson) and the hon. Member for Eccles (Mr. Carter-Jones) argued, not for the first time, the case for exempting charities from VAT. If I pursued that for long I should be in trouble with you, Mr. Armstrong. I do not find it all that alluring to listen to right hon. and hon. Gentlemen who had the opportunity to remove VAT from charities in five years of government but did nothing about it, saying today that it is a question of will. They knew then that the subject was more complex than that. I am not attracted by lectures from right hon. and hon. Members who ask us to take action which they were not prepared to take when in office. We shall discuss these matters in greater detail upstairs. It is more appropriate to discuss them then.
My hon. Friend the Member for Northampton, North (Mr. Marlow) made a powerful plea for the abolition of VAT and for raising the threshold. The hon. Member for Workington (Mr. Campbell-Savours) seemed to argue in the opposite direction in favour of lowering the threshold. If I entered into that argument I should be out of order. It is not true that the only obstacle to a substantial raising of the VAT threshold is the European Community's attitude. Many traders are strongly opposed to a large increase in the threshold, although I confess that in terms of tax efficiency there is much to be said for it.
The hon. Member for Workington culled many reports from the Sunday press. I assure him that they were, to a substantial extent, inaccurate. In any case, I confess that their connection with the new clauses is not immediately apparent to me. I concede one matter to the hon. Gentleman. He said that if we reduced the level of VAT that would tend to reduce the incentive for under-declaration. That must be true. It is a fair point and I accept it, but unfortunately there are more substantial objections to taking the action which the new clauses call upon us to take.
The hon. Member for Blackburn ranged wide in his speech. I should love to deal with what he said about exchange rate policy. I made a good speech about it last weekend. I shall send the hon. Gentleman a copy. That would be safer than discussing it this evening.
6.45 pm
The hon. Member said about half a dozen words which were relevant to the new clauses. He said that the increase in VAT from 8 per cent. to 15 per cent. in 1979 was solely responsible, or almost solely responsible, for the increase in inflation from 10 per cent. to 22 per cent. It is unwise for hon. Members on either side to pursue that line, although I accept that some of my hon. Friends did just that after the Labour Government took office in 1974. They said that the course of inflation in the first 18 months of a Government's life is predominantly determined by the Government's actions. I believe that to be untrue. I believed it to be untrue in 1974 and in 1979–80. The fact is that the increase in VAT in the summer of 1979 added 3·5 per cent. to the RPI—that is all. It is nonsense to pretend that it was the sole or even predominant factor in the rise in inflation which followed this Government's assumption to office. The dominant factor was the trend of inflation which the Labour party left behind. It is ludicrous to pretend otherwise.
The hon. Member for Gateshead, West (Mr. Horam) said more than the hon. Member for Blackburn said about the new clauses. There is common ground on the factual implications of the proposal. New clause 1 would cost us about £1,400 million in a full year and new clause 5 about £1,800 million. If the House decided to give immediate effect to new clause 1, the RPI to be published in June, for May, would probably be about 1 per cent. lower than otherwise. If the House approved the alliance new clause, the RPI for October this year would probably be about 1·25 per cent. lower. One year later, in the index published in June 1984 or the index published in November 1984, that bonus would have disappeared, although the impact of either new clause on the general level of prices would endure. We can agree about that, but the rest is speculation.
Opposition Members argue that the immediate reduction in the RPI would have an effect on attitudes to wage bargaining and that that would have a knock-on repercussion on inflation. I argue that, unless we took steps to recoup the revenue to be forgone by the passage of the new clauses, we would be bound to expect that the higher borrowing rate would lead to interest rates being higher than otherwise, or alternatively that the rate of growth in the domestic money supply would accelerate in a manner that would presage higher inflation. If, on the other hand, we were to recoup the revenue forgone by higher taxation, the secondary effects, for which the hon. Member for Gateshead, West was looking, in inflationary expectations would be negatived by those alternative forms of inflation.

Mr. Horam: rose—

Mr. Bruce-Gardyne: The hon. Member for Blackburn will have an opportunity to reply, so, if the hon. Member for Gateshead, West will allow me, I will continue and conclude my remarks.
Quite apart from what I see as the practical objections of revenue impact and inflationary expectations, there is a more philosophical objection to the new clauses. We


have heard from the hon. Member for Blackburn and others about what was said in the Conservative election manifesto. The hon. Member for Blackburn was good enough to say that we had made it clear that we intended to shift from direct to indirect taxation. Why he should then say that we had made it clear that we intended to do the opposite is not clear. What was said in the manifesto was accurate and was, indeed, our intention. That was why my right hon. and learned Friend the Chancellor decided in 1979 to raise VAT to 15 per cent. Even at the 15 per cent. rate, perpetuated in my right hon. and learned Friend's Budget this year, we are by no means out of line with our European partners. Only Luxembourg and Germany have lower standard rates. All the other countries have higher standard rates — some have substantially higher rates. While it was the conscious intention of the Government to tilt the balance back from tax on income to tax on spending, it is worth noting that since 1979 the balance has once again been slipping. In 1979–80, after my right hon. and learned Friend's first Budget, we drew 54·5 per cent. of our tax from spending taxes and 45·5 per cent. from earning taxes. Last year the figures were 51·5 per cent. from spending taxes and 48·5 per cent. from earning taxes. On those grounds, too, the new clauses do not appear attractive to the Government. On those self-same grounds, the new clauses should not appear attractive to the Opposition parties.
Let us consider the record. In the final year of the Government of my right hon. Friend the Member for Sidcup (Mr. Heath), the share of direct and indirect taxes in the total revenue was almost 50–50. Then the right hon. Member for Leeds, East (Mr. Healey) took over and in the first flush of his pip-squeaking populism, shifted sharply in the direction of taxes on earnings to a balance of 53 per cent. of revenue from earnings and 47 per cent. of revenue from expenditure taxes. So far so good. The right hon. Gentleman did not maintain that position. By 1978–79, the right hon. Gentleman's last year in office, the direct tax take was down to 48·5 per cent. and the indirect tax take was up to 51·5 per cent. — precisely the same percentages as in the last financial year. This did not happen in a fit of absent-mindedness. On 30 November 1976—this will answer the points of the hon. Members for South Ayrshire (Mr. Foulkes) and for Aberdare (Mr. Evans)—the right hon. Member for Leeds, East said:
It certainly was true 30 years ago that, broadly, indirect taxation was regressive and income tax was progressive, in the social sense. That is no longer true when income tax is paid at levels of earnings below those which qualify for supplementary benefit. It cannot really be regarded as a progressive tax. On the other hand, the structure of the value added tax, which zero rates half—the most important half—of family expenditure, can be shown to be in many respects progressive rather than regressive." —[Official Report, 30 November 1976; Vol. 921, c. 719.]

Mr. Foulkes: Not at all.

Mr. Bruce-Gardyne: That was the verdict of the right hon. Member for Leeds, East. The right hon. Member for Heywood and Royton (Mr. Barnett), whom I am delighted to see in his place, said in that seminal work, Inside the Treasury, about the cut in VAT from 10 per cent. to 8 per cent. in 1974:
To my mind, this was a move in absolutely the wrong direction. We should have been increasing indirect taxes, not reducing them. I know that when I first joined the Labour party we all believed that income tax, since it fell on the rich, was good

and progressive, whilst indirect taxes … on consumer goods placed an unfair burden on the poor. That principle was justified then, when few workers were paying much income tax, but it has no relevance today, when the greater part of the income tax yield comes from average-paid workers, and when VAT is not levied on necessities such as food".
We expect the right hon. Member for Leeds, East to change his views as often as he changes his socks, but we know and respect the right hon. Member for Heywood and Royton as a man of principle. On that basis alone, I hope that he will join us in the Lobby in opposition to the new clause.
To agree to the new clauses would give our fiscal system another lurch in the direction of excessive reliance on direct taxation. On those grounds alone, and for the reasons so cogently argued in the past both by the right hon. Member for Leeds, East and the right hon. Member for Heywood and Royton, the new clauses should be resisted. The way to deal with inflation and the way to maintain our progress towards more stable prices is to follow the course that the Government have been pursuing, which has produced already the lowest inflation in this country since the early 1960s. As I informed the hon. Member for Glasgow, Central (Mr. McTaggart) in a written answer yesterday, over the life of this Government the rise in prices has been barely half that of the previous Government.
By the consistent pursuit of sound and stable fiscal and monetary policies, Britain will enjoy the benefits of a permanent return to stable prices. That is the way to beat inflation. The new clauses are worse than a red herring. They are a snare and a delusion. I invite the House to throw them out.

Mr. Straw: I apologise to my right hon. Friend the Member for Norwich, North (Mr. Ennals) and to my hon. Friends the Members for South Ayrshire (Mr. Foulkes), for Barking (Miss Richardson) and for Eccles (Mr. Carter-Jones) for not being able to deal with the point they raised in the short time that is available to me.
My hon. Friend the Member for Workington (Mr. Campbell-Savours) pointed out that the Government are losing hundreds of millions of pounds through the lack of effective collection machinery for value added tax. My hon. Friend pointed out that a high rate of VAT encourages evasion and he drew to the attention of the House the fact that, over the past four years, the Government have reduced the effectiveness of fraud officers and the collection procedures for value added tax and income tax while at the same time pursuing so-called social security scroungers for benefits to the Revenue which are infinitely smaller.
Both sides of the House have accepted that the cost of new clause 1 would be about £1,400 million in a full year. Unlike the alliance parties, we do not resile from that cost and we do not suggest that the initial cost would be anything like the full year cost. We believe that the costs can be met from borrowing and that there is no need to raise taxation.
Before Conservative Members become completely befuddled by their dogmas, I must tell them that money is available. Figures produced yesterday show that £4 billion is flowing abroad every year under the Conservative Government. The savings of the British people are being forced abroad by city institutions to be invested not in the strength of the British economy but in the strength of our competitors abroad. The reintroduction


of exchange controls would make those funds available to the Government and British firms to invest in the health of our economy.
7 pm
As fund managers recognise, if exchange controls were reintroduced, it would be possible for the Government to borrow on a funded basis from the markets without an increase in interest rates. The total cost of our proposals would add about £6 billion to the PSBR, which would still mean a PSBR of 4 per cent. of GDP, well below the average for the other major competitors within OECD.
Our principal reason for proposing a reduction in VAT from 15 per cent. to 13 per cent. is to offset the rise in inflation that is in the pipeline and which is due to the fall in sterling that has already taken place. It was significant that the Economic Secretary did not say a word about the prospects for inflation in the year ahead; nor would he accept interventions. Every Minister knows that, although inflation has come down to about the average for our competitors, it will rise inexorably towards the end of the year to 6, 7 or 8 per cent.

Mr. Bruce-Gardyne: The Red Book published at the time of the Budget stated that the expected rise in the RPI by the end of this year would be about 6 per cent. The evidence since then is that, if anything, that may err on the side of pessimism, and there are reasons to expect that the outturn may be better.

Mr. Straw: We shall see. If that is the case, why are so many Ministers desperate for a cut and run election in June? Indeed, the Economic Secretary, who has an interest in this Parliament running to the end of the century, seems to be the only Minister pressing for the election to be delayed past June.
We do not mind when the election comes, because a central issue will be the Government's record on taxation. They promised to reduce direct taxation, yet they have forced up direct taxation to unparalleled levels. They promised that there would be no doubling of VAT, yet that is what they have done. When the election comes, the people will vote against the Government, not least for the way in which they deceived them on taxation issues at the last election.
The new clause makes some modest recompense to the British electorate for the way in which it was deceived in 1979. It also seeks to offset the unquestionable rise in inflation that will take place towards the end of the year. I commend it to the Committee.

Question put, That the clause be now read a Second time:—

The Committee divided: Ayes 211, Noes 256.

Division No. 134]
[7.03 pm


AYES


Abse, Leo
Booth, Rt Hon Albert


Allaun, Frank
Boothroyd, Miss Betty


Alton, David
Bottomley, Rt Hon A.(M'b'ro)


Archer, Rt Hon Peter
Bradley, Tom


Ashley, Rt Hon Jack
Bray, Dr Jeremy


Ashton, Joe
Brown, Hugh D. (Provan)


Atkinson, N.(H'gey,)
Brown, R. C. (N'castle W)


Bagier, Gordon AT.
Brown, Ronald W. (H'ckn'y S)


Barnett, Guy (Greenwich)
Brown, Ron (E'burgh, Leith)


Barnett, Rt Hon Joel (H'wd)
Callaghan, Rt Hon J.


Beith, A. J.
Callaghan, Jim (Midd't'n &amp; P)


Benn, Rt Hon Tony
Campbell, Ian


Bennett, Andrew(St'kp't N)
Campbell-Savours, Dale


Bidwell, Sydney
Canavan, Dennis





Cant, R. B.
Kinnock, Neil


Carter-Jones, Lewis
Lambie, David


Cartwright, John
Lamond, James


Clark, Dr David (S Shields)
Lead bitter, Ted


Clarke.Thomas(C'b'dge, A'rie)
Leighton, Ronald


Cocks, Rt Hon M. (B'stol S)
Litherland, Robert


Cohen, Stanley
Lofthouse, Geoffrey


Coleman, Donald
Lyons, Edward (Bradf'd W)


Concannon, Rt Hon J. D.
Mabon, Rt Hon Dr J. Dickson


Cook, Robin F.
McDonald, Dr Oonagh


Cowans, Harry
McKay, Allen (Penistone)


Craigen, J. M. (G'gow, M'hill)
McKelvey, William


Crowther, Stan
Maclennan, Robert


Cryer, Bob
McNally, Thomas


Cunningham, G. (Islington S)
McTaggart, Robert


Cunningham, Dr J. (W'h'n)
McWilliam, John


Dalyell, Tam
Magee, Bryan


Davidson, Arthur
Marshall, D.(G'gow S'ton)


Davies, Rt Hon Denzil (L'lli)
Marshall, Jim (Leicester S)


Davis, Clinton (Hackney C)
Mason, Rt Hon Roy


Davis, Terry (B'ham, Stechf'd)
Maxton, John


Deakins, Eric
Maynard, Miss Joan


Dean, Joseph (Leeds West)
Meacher, Michael


Dewar, Donald
Mikardo, Ian


Dixon, Donald
Millan, Rt Hon Bruce


Dobson, Frank
Mitchell, Austin (Grimsby)


Dormand, Jack
Molyneaux, James


Duffy, A. E. P.
Morris, Rt Hon A. (W'shawe)


Dunlop, John
Morris, Rt Hon C. (O'shaw)


Dunnett, Jack
Morton, George


Dunwoody, Hon Mrs G.
Moyle, Rt Hon Roland


Eadie, Alex
Oakes, Rt Hon Gordon


Ellis, R. (NE D'bysh're)
O'Brien, Oswald (Darlington)


Ellis, Tom (Wrexham)
Ogden, Eric


English, Michael
O'Halloran, Michael


Ennals, Rt Hon David
O'Neill, Martin


Evans, Ioan (Aberdare)
Orme, Rt Hon Stanley


Field, Frank
Park, George


Flannery, Martin
Parker, John


Ford, Ben
Parry, Robert


Forrester, John
Pendry, Tom


Foster, Derek
Penhaligon, David


Foulkes, George
Pitt, William Henry


Fraser, J. (Lamb'th, N'w'd)
Powell, Rt Hon J.E. (S Down)


Freeson, Rt Hon Reginald
Price, C. (Lewisham W)


Freud, Clement
Race, Reg


Garrett, John (Norwich S)
Radice, Giles


George, Bruce
Rees, Rt Hon M (Leeds S)


Golding, John
Richardson, Jo


Graham, Ted
Roberts, Albert (Normanton)


Grant, John (Islington C)
Roberts, Allan (Bootle)


Grimond, Rt Hon J.
Roberts, Ernest (Hackney N)


Hamilton, James (Bothwell)
Roberts, Gwilym (Cannock)


Hamilton, W. W. (C'tral Fife)
Robertson, George


Harman, Harriet (Peckham)
Robinson, G. (Coventry NW)


Harrison, Rt Hon Walter
Rooker, J. W.


Hart, Rt Hon Dame Judith
Roper, John


Hattersley, Rt Hon Roy
Ross, Ernest (Dundee West)


Haynes, Frank
Ross, Stephen (Isle of Wight)


Healey, Rt Hon Denis
Rowlands, Ted


Heffer, Eric S.
Sandelson, Neville


Hogg, N. (E Dunb't'nshire)
Sever, John


Home Robertson, John
Sheldon, Rt Hon R.


Homewood, William
Shore, Rt Hon Peter


Hooley, Frank
Silkin, Rt Hon J. (Deptford)


Horam, John
Silverman, Julius


Howells, Geraint
Skinner, Dennis


Hoyle, Douglas
Smith, Rt Hon J. (N Lanark)


Huckfield, Les
Smyth, Rev. W. M. (Belfast S)


Hudson Davies, Gwilym E.
Soley, Clive


Hughes, Mark (Durham)
Spearing, Nigel


Hughes, Robert (Aberdeen N)
Spriggs, Leslie


Hughes, Roy (Newport)
Steel, Rt Hon David


Hughes, Simon (Bermondsey)
Stewart, Rt Hon D. (W Isles)


Janner, Hon Greville
Stott, Roger


Jay, Rt Hon Douglas
Straw, Jack


Jenkins, Rt Hon Roy (Hillh'd)
Summerskill, Hon Dr Shirley


Johnson, James (Hull West)
Taylor, Mrs Ann (Bolton W)


Jones, Barry (East Flint)
Thomas, Jeffrey (Abertillery)


Kaufman, Rt Hon Gerald
Thomas, Dr R. Carmarthen)






Thorne, Stan (Preston South)
Williams, Rt Hon Mrs(Crosby,


Tilley, John
Wilson, Gordon (Dundee E)


Tinn, James
Wilson, Rt Hon Sir H.(H'ton)


Varley, Rt Hon Eric G.
Wilson, William (C'try SE)


Wainwright, R.(Colne V)
Winnick, David


Walker, Rt Hon H.(D'caster)
Woodall, Alec


Wardell, Gareth
Wrigglesworth, Ian


Watkins, David
Wright, Sheila


Weetch, Ken
Young, David (Bolton E)


White, Frank R.



Whitehead, Phillip
Tellers for the Ayes:


Whitlock, William
Mr. Lawrence Cunliffe and


Willey, Rt Hon Frederick
Mr. Hugh McCartney.


Williams, Rt Hon A.(S'sea W)



NOES


Adley, Robert
Dykes, Hugh


Aitken, Jonathan
Eden, Rt Hon Sir John


Alexander, Richard
Edwards, Rt Hon N. (P'broke)


Alison, Rt Hon Michael
Eggar, Tim


Ancram, Michael
Elliott, Sir William


Arnold, Tom
Emery, Sir Peter


Aspinwall, Jack
Eyre, Reginald


Atkins, Rt Hon H.(S'thorne)
Faith, Mrs Sheila


Atkins, Robert(Preston N)
Farr, John


Baker, Kenneth(St.M'bone)
Fell, Sir Anthony


Baker, Nicholas (N Dorset)
Fenner, Mrs Peggy


Banks, Robert
Finsberg, Geoffrey


Bendall, Vivian
Fisher, Sir Nigel


Benyon, Thomas (A'don)
Fletcher, A. (Ed'nb'gh N)


Benyon, W. (Buckingham)
Fletcher-Cooke, Sir Charles


Berry, Hon Anthony
Fookes, Miss Janet


Best, Keith
Forman, Nigel


Bevan, David Gilroy
Fowler, Rt Hon Norman


Biffen, Rt Hon John
Fox, Marcus


Biggs-Davison, Sir John
Fraser, Rt Hon Sir Hugh


Blackburn, John
Fraser, Peter (South Angus)


Body, Richard
Fry, Peter


Bonsor, Sir Nicholas
Gardiner, George (Reigate)


Boscawen, Hon Robert
Gardner, Sir Edward


Bottomley, Peter (W'wich W)
Gilmour, Rt Hon Sir Ian


Bowden, Andrew
Glyn, Dr Alan


Boyson, Dr Rhodes
Goodhew, Sir Victor


Braine, Sir Bernard
Goodlad, Alastair


Bright, Graham
Gorst, John


Brinton, Tim
Gow, Ian


Brittan, Rt. Hon. Leon
Gower, Sir Raymond


Brooke, Hon Peter
Gray, Rt Hon Hamish


Brotherton, Michael
Greenway, Harry


Brown, Michael(Brigg &amp; Sc'n)
Griffiths, E.(B'ySt. Edm'ds)


Bruce-Gardyne, John
Griffiths, Peter (Portsm'th N)


Bryan, Sir Paul
Grist, Ian


Buck, Antony
Grylls, Michael


Budgen, Nick
Gummer, John Selwyn


Bulmer, Esmond
Hamilton, Hon A.


Burden, Sir Frederick
Hamilton, Michael (Salisbury)


Butler, Hon Adam
Hampson, Dr Keith


Carlisle, John (Luton West)
Hannam, John


Carlisle, Kenneth (Lincoln)
Haselhurst, Alan


Carlisle, Rt Hon M. (R'c'n)
Hastings, Stephen


Chalker, Mrs. Lynda
Havers, Rt Hon Sir Michael


Channon, Rt. Hon. Paul
Hawksley, Warren


Chapman, Sydney
Hayhoe, Barney


Churchill, W. S.
Heddle, John


Clark, Hon A. (Plym'th, S'n)
Henderson, Barry


Clark, Sir W. (Croydon S)
Heseltine, Rt Hon Michael


Clarke, Kenneth (Rushcliffe)
Hicks, Robert


Clegg, Sir Walter
Higgins, Rt Hon Terence L.


Cockeram, Eric
Hogg, Hon Douglas (Gr'th'm)


Cope, John
Holland, Philip (Carlton)


Cormack, Patrick
Hooson, Tom


Corrie, John
Hordern, Peter


Costain, Sir Albert
Howell, Rt Hon D. (G'ldf'd)


Cranborne, Viscount
Hunt, David (Wirral)


Critchley, Julian
Hunt, John (Ravensbourne)


Crouch, David
Irvine, RtHon Bryant Godman


Dorrell, Stephen
Irving, Charles (Cheltenham)


Douglas-Hamilton, Lord J.
Jenkin, Rt Hon Patrick


Dunn, Robert (Dartford)
Jopling, Rt Hon Michael


Durant, Tony
Joseph, Rt Hon Sir Keith





Kaberry, Sir Donald
Rathbone, Tim


Kershaw, Sir Anthony
Rees, Peter (Dover and Deal)


Kimball, Sir Marcus
Rees-Davies, W. R.


King, Rt Hon Tom
Renton, Tim


Knox, David
Rhodes James, Robert


Lamont, Norman
Ridley, Hon Nicholas


Latham, Michael
Ridsdale, Sir Julian


Lawrence, Ivan
Rippon, Rt Hon Geoffrey


Lawson, Rt Hon Nigel
Roberts, Wyn (Conway)


Lee, John
Rossi, Hugh


Le Marchant, Spencer
Sainsbury, Hon Timothy


Lennox-Boyd, Hon Mark
St. John-Stevas, Rt Hon N.


Lewis, Sir Kenneth (Rutland)
Shaw, Giles (Pudsey)


Lloyd, Peter (Fareham)
Shaw, Sir Michael (Scarb')


Loveridge, John
Shelton, William (Streatham)


Luce, Richard
Shepherd, Colin (Hereford)


Lyell, Nicholas
Shepherd, Richard


McCrindle, Robert
Silvester, Fred


Macfarlane, Neil
Skeet, T. H. H.


MacGregor, John
Smith, Tim (Beaconsfield)


MacKay, John (Argyll)
Speed, Keith


Macmillan, Rt Hon M.
Speller, Tony


McNair-Wilson, M. (N'bury)
Spence, John


McNair-Wilson, P. (New F'st)
Spicer, Jim (West Dorset)


McQuarrie, Albert
Spicer, Michael (S Worcs)


Madel, David
Squire, Robin


Major, John
Stanley, John


Marland, Paul
Steen, Anthony


Marlow, Antony
Stevens, Martin


Marten, Rt Hon Neil
Stewart, A.(E Renfrewshire)


Mather, Carol
Stewart, Ian (Hitchin)


Maude, Rt Hon Sir Angus
Stokes, John


Mawby, Ray
Stradling Thomas, J.


Mawhinney, Dr Brian
Tapsell, Peter


Maxwell-Hyslop, Robin
Taylor, Teddy (S'end E)


Meyer, Sir Anthony
Tebbit, Rt Hon Norman


Mills, Iain (Meriden)
Thomas, Rt Hon Peter


Mills, Sir Peter (West Devon)
Thompson, Donald


Miscampbell, Norman
Thornton, Malcolm


Moate, Roger
Townend, John (Bridlington)


Monro, Sir Hector
Townsend, Cyril D, (B'heath)


Montgomery, Fergus
Trippier, David


Moore, John
van Straubenzee, Sir W.


Morris, M. (N'hampton S)
Vaughan, Dr Gerard


Morrison, Hon C. (Devizes)
Waddington, David


Mudd, David
Wakeham,John


Murphy, Christopher
Waldegrave, Hon William


Myles, David
Walker, B. (Perth)


Neale, Gerrard
Walker-Smith, Rt Hon Sir D.


Needham, Richard
Waller, Gary


Nelson, Anthony
Walters, Dennis


Neubert, Michael
Watson, John


Newton, Tony
Wells, Bowen


Page, Richard (SW Herts)
Wells, John (Maidstone)


Parkinson, Rt Hon Cecil
Wheeler, John


Parris, Matthew
Whitelaw, Rt Hon William


Patten, John (Oxford)
Whitney, Raymond


Pawsey, James
Wickenden, Keith


Percival, Sir Ian
Wiggin, Jerry


Peyton, Rt Hon John
Williams, D. (Montgomery)


Pink, R. Bonner
Wolfson, Mark


Pollock, Alexander
Young, Sir George (Acton)


Porter, Barry



Prentice, Rt Hon Reg
Tellers for the Noes:


Proctor, K. Harvey
Mr. Tristan Garel-Jones and


Pym, Rt Hon Francis
Mr. Ian Lang.

Question accordingly negatived.

New clause 5

DECREASE OF RATE OF VALUE-ADDED TAX

'(1) In section 9(1) of the Finance Act 1972 (Standard Rate of value-added tax) as amended by the Finance (No. 2) Act 1979 for the words "fifteen per cent." there shall be substituted the words "Twelve and a half per cent.
(2) The above section 1 shall come into effect on 1st October 1983.'.—[Mr. David Steel.]

Brought up, and read the First time.

Question put, That the clause be now read a Second time:—

The Committee divided: Ayes 39, Noes 234.

Division No. 135]
[7.16 pm


AYES


Alton, David
Magee, Bryan


Bradley, Tom
Molyneaux, James


Brown, Ronald W. (H'ckn'y S)
Ogden, Eric


Canavan, Dennis
Parry, Robert


Carter-Jones, Lewis
Penhaligon, David


Cartwright, John
Pitt, William Henry


Cunningham, G. (Islington S)
Ross, Stephen (Isle of Wight)


Dixon, Donald
Sandelson, Neville


Dunlop, John
Skinner, Dennis


Ellis, Tom (Wrexham)
Smyth, Rev. W. M. (Belfast S)


Freud, Clement
Steel, Rt Hon David


Grant, John (Islington C)
Stewart, Rt Hon D. (W Isles)


Grimond, Rt Hon J.
Wainwright, R.(Colne V)


Horam, John
Williams, Rt Hon Mrs(Crosby)


Howells, Geraint
Wilson, Gordon (Dundee E)


Hudson Davies, Gwilym E.
Winnick, David


Hughes, Simon (Bermondsey)
Wrigglesworth, Ian


Jenkins, Rt Hon Roy (Hillh'd)



Lyons, Edward (Bradf'd W)
Tellers for the Ayes:


Mabon, Rt Hon Dr J. Dickson
Mr. A. J. Beith and


Maclennan, Robert
Mr. John Roper.


McNally, Thomas



NOES


Adley, Robert
Clarke, Kenneth (Rushcliffe)


Aitken, Jonathan
Clegg, Sir Walter


Alexander, Richard
Cockeram, Eric


Alison, Rt Hon Michael
Cope, John


Ancram, Michael
Cormack, Patrick


Arnold, Tom
Costain, Sir Albert


Aspinwall, Jack
Cranborne, Viscount


Atkins, Rt Hon H.(S'thorne)
Critchley, Julian


Atkins, Robert(Preston N)
Crouch, David


Baker, Kenneth(St.M'bone)
Dorrell, Stephen


Baker, Nicholas (N Dorset)
Douglas-Hamilton, Lord J.


Banks, Robert
Dunn, Robert (Dartford)


Bendall, Vivian
Durant, Tony


Benyon, Thomas (A'don)
Dykes, Hugh


Benyon, W. (Buckingham)
Eden, Rt Hon Sir John


Berry, Hon Anthony
Edwards, Rt Hon N. (P'broke)


Best, Keith
Eggar, Tim


Bevan, David Gilroy
Elliott, Sir William


Biffen, Rt Hon John
Emery, Sir Peter


Biggs-Davison, Sir John
Farr, John


Blackburn, John
Fenner, Mrs Peggy


Body, Richard
Finsberg, Geoffrey


Bonsor, Sir Nicholas
Fisher, Sir Nigel


Boscawen, Hon Robert
Fletcher, A. (Ed'nb'gh N)


Bottomley, Peter (W'wich W)
Fletcher-Cooke, Sir Charles


Boyson, Dr Rhodes
Fookes, Miss Janet


Braine, Sir Bernard
Forman, Nigel


Bright, Graham
Fowler, Rt Hon Norman


Brinton, Tim
Fox, Marcus


Brittan, Rt. Hon. Leon
Fraser, Rt Hon Sir Hugh


Brooke, Hon Peter
Fraser, Peter (South Angus)


Brotherton, Michael
Fry, Peter


Bruce-Gardyne, John
Gardiner, George (Reigate)


Bryan, Sir Paul
Gardner, Sir Edward


Buck, Antony
Gilmour, Rt Hon Sir Ian


Budgen, Nick
Glyn, Dr Alan


Bulmer, Esmond
Goodlad, Alastair


Burden, Sir Frederick
Gorst, John


Butler, Hon Adam
Gow, Ian


Carlisle, John (Luton West)
Gower, Sir Raymond


Carlisle, Kenneth (Lincoln)
Gray, Rt Hon Hamish


Carlisle, Rt Hon M. (R'c'n )
Greenway, Harry


Chalker, Mrs. Lynda
Griffiths, E.(B'y St. Edm'ds)


Channon, Rt. Hon. Paul
Griffiths, Peter (Portsm'th N)


Chapman, Sydney
Grist, Ian


Clark, Hon A. (Plym'th, S'n)
Gummer, John Selwyn


Clark, Sir W. (Croydon S)
Hamilton, Hon A.





Hamilton, Michael (Salisbury)
Page, Richard (SW Hert's)


Hannam,John
Parkinson, Rt Hon Cecil


Haselhurst, Alan
Parris, Matthew


Hastings, Stephen
Patten, John (Oxford)


Havers, Rt Hon Sir Michael
Pawsey, James


Heath, Rt Hon Edward
Percival, Sir Ian


Heddle, John
Peyton, Rt Hon John


Henderson, Barry
Pink, R. Bonner


Heseltine, Rt Hon Michael
Pollock, Alexander


Hicks, Robert
Porter, Barry


Higgins, Rt Hon Terence L.
Prentice, Rt Hon Reg


Hogg, Hon Douglas (Gr'th'm)
Proctor, K. Harvey


Holland, Philip (Carlton)
Rathbone, Tim


Hooson, Tom
Rees, Peter (Dover and Deal)


Hordern, Peter
Rees-Davies, W. R


Howell, Rt Hon D. (G'ldf'd)
Renton, Tim


Hunt, David (Wirral)
Rhodes James, Robert


Hunt, John (Ravensbourne)
Ridley, Hon Nicholas


Irvine, RtHon Bryant Godman
Ridsdale, Sir Julian


Irving, Charles (Cheltenham)
Rippon, Rt Hon Geoffrey


Jenkin, Rt Hon Patrick
Roberts, Wyn (Conway)


Jopling, Rt Hon Michael
Rossi, Hugh


Joseph, Rt Hon Sir Keith
Sainsbury, Hon Timothy


Kaberry, Sir Donald
Shaw, Giles (Pudsey)


Kershaw, Sir Anthony
Shaw, Sir Michael (Scarb')


King, Rt Hon Tom
Shelton, William (Streatham)


Knox, David
Shepherd, Colin (Hereford)


Lamont, Norman
Shepherd, Richard


Latham, Michael
Silvester, Fred


Lawrence, Ivan
Skeet, T. H. H.


Lawson, Rt Hon Nigel
Smith, Tim (Beaconsfield)


Lennox-Boyd, Hon Mark
Speed, Keith


Lewis, Sir Kenneth (Rutland)
Speller, Tony


Lloyd, Peter (Fareham)
Spence, John


Loveridge, John
Spicer, Jim (West Dorset)


Luce, Richard
Spicer, Michael (S Worcs)


Lyell, Nicholas
Squire, Robin


McCrindle, Robert
Stanley, John


Macfarlane, Neil
Steen, Anthony


MacGregor, John
Stevens, Martin


MacKay, John (Argyll)
Stewart, A, (E Renfrewshire)


Macmillan, Rt Hon M.
Stewart, Ian (Hitchin)


McNair-Wilson, M. (N'bury)
Stradling Thomas, J.


McNair-Wilson, P. (New F'st)
Tapsell, Peter


McQuarrie, Albert
Taylor, Teddy (S'end E)


Madel, David
Tebbit, Rt Hon Norman


Major, John
Thompson, Donald


Marland, Paul
Thornton, Malcolm


Marlow, Antony
Townend, John (Bridlington)


Marten, Rt Hon Neil
Trippier, David


Mather, Carol
van Straubenzee, Sir W.


Maude, Rt Hon Sir Angus
Vaughan, Dr Gerard


Mawby, Ray
Waddington, David


Mawhinney, Dr Brian
Wakeham, John


Maxwell-Hyslop, Robin
Waldegrave, Hon William


Meyer, Sir Anthony
Walker-Smith, Rt Hon Sir D.


Mills, Iain (Meriden)
Waller, Gary


Mills, Sir Peter (West Devon)
Watson, John


Miscampbell, Norman
Wells, Bowen


Moate, Roger
Wells, John (Maidstone)


Monro, Sir Hector
Wheeler, John


Montgomery, Fergus
Whitelaw, Rt Hon William


Moore, John
Whitney, Raymond


Morris, M. (N'hampton S)
Wickenden, Keith


Morrison, Hon C. (Devizes)
Wiggin, Jerry


Murphy, Christopher
Williams, D.(Montgomery)


Myles, David
Wolfson, Mark


Neale, Gerrard
Young, Sir George (Acton)


Needham, Richard



Nelson, Anthony
Tellers for the Noes:


Neubert, Michael
Mr. Tristan Garel-Jones and


Newton, Tony
Mr. Ian Lang.

Question accordingly negatived

To report Progress and ask leave to sit again tomorrow. —[Mr. Bruce-Gardyne.]

Committee report Progress; to sit again tomorrow.

Education (Fees and Awards) Bill

Order for Second Reading read.

The Under-Secretary of State for Education and Science (Mr. William Waldegrave): I beg to move, That the Bill be now read a Second time.
The Bill is an urgent measure, which is designed to restore the position of overseas students in two important respects to what it was understood to be before a ruling given in another place on 16 December last. There would be serious consequences for institutions and for public expenditure—and much uncertainty on the part of the students themselves—if the Government did not seek to have this legislation enacted before the next academic year begins in the autumn. Before turning to the detailed provisions of the Bill I shall explain the background that gives rise to the need for it.
Under Governments of both parties overseas students have been treated differently from home students in three particular ways. First, they have not been entitled to student grants — that is, to the "mandatory awards" providing help with fees and living costs that education authorities are obliged to give to most undergraduates. Second, they have not been eligible for a variety of other grants —"discretionary awards" — that may be paid to home students not eligible for mandatory awards by education authorities, research councils and others. Third, they have been charged higher fees than home students. Under the present Government their fees are expected to cover the full cost of their education, but previous Governments too have operated a differential fee system.
The distinction that successive Governments and other award-making bodies have made between home and overseas students for these purposes has been based on the concept of residence or "ordinary residence". Students were or were not eligible for particular benefits or rates of fee on the basis of whether they had or had not been resident or ordinarily resident here for a particular period —usually three years. In 1980 the Government brought the test of eligibility for home fees into line with that for mandatory awards, by adopting the criterion of ordinary residence for all purposes.
Until the Lords' judgment on 16 December last the test of where a student was ordinarily resident was generally taken to be that of where his real home was. Boys and girls who came here for a few years to go to school were believed not to become ordinarily resident if their home remained in another country. Many adults who came here temporarily as members of diplomatic missions or representing foreign firms retained their homes abroad and neither they nor their children were thought to be ordinarily resident here.
Last year, however, it was ruled in another place that the question to be asked to determine whether or not someone was ordinarily resident here was:
Has the applicant shown that he has habitually and normally resided in the United Kingdom from choice and for a settled purpose throughout the prescribed period, apart from temporary or occasional absences?
We are grateful to have this clarification, as it provides certainty in an area which had been increasingly open to doubt. But the ruling means that a student's ordinary residence alone is no longer a sufficient test to allow us to maintain previous policies towards different categories of students. We therefore need to change the letter of the

rules so that, in the light of the authoritative interpretation of "ordinary residence", they continue to reflect a consistent spirit.
I should say a word about the position of present students. The Government intend that students who do not qualify for the home student rate of fee for 1983–84, and subsequent academic years, under the regulations to be made, if the House approves the Bill, should pay the overseas rate for those years even if they can claim in the light of the December ruling that they should have been regarded as ordinarily resident here in the current academic year or in earlier years.
A student's residential status at the beginning of the course does not determine his liability to fees for the whole course. I recognise that some students paying the overseas rate in the current academic year can claim to be ordinarily resident here in terms of the December ruling, but they come here in the expectation of having to pay the higher fee and are not therefore suffering as a result of the ruling. Such students should not assume that there is any general principle that imposes an obligation of liability on authorities or institutions to make any refund for fees previously paid even if the student concerned establishes an entitlement to an award for the year in question.
Circumstances will vary widely among students, institutions and authorities, and institutions will have to consider individual cases on the facts and in the light of their own legal advice.

Mr. Christopher Price: When the Bill was announced, it was said that there was no intention to bring in retrospective legislation. The force of what the Minister has just said is either a determination to make the measure into de facto retrospective legislation in terms of certain years of a student's course or an interpretation by the Minister from the Dispatch Box of the law in the light of the Scarman judgment in the period between that judgment and any Royal Assent that would change the law. Which is it?

Mr. Waldegrave: It is a gloss on what we understand the rule will be after Royal Assent—not in the present period. There is no retrospection here. The relationship between the regimes for fees and mandatory awards is different. If we had asked—as some of my hon. Friends and others may believe that we should have asked because there was a moral case for so doing—to go right back and make it impossible for anyone in any circumstances to claim mandatory awards, that would certainly have been retrospective legislation. We decided not to do that, as I believe has been generally recognised. As I have said, the situation as between fees and mandatory awards, which will be discussed in a Statutory Instruments Committee tomorrow on the prayer, is different.
In adapting the rules, however, it is necessary to ensure that we do so within the provisions of the Race Relations Act 1976. I shall explain briefly how the relevant provisions of that Act bear on the present situation.
It has been the policy of successive Governments that all people who have demonstrated that they are properly settled here should be treated equally and enjoy equal access to benefits paid for from the public's rates and taxes, but it has also been accepted that it is unnecessary to bestow the same benefits on those not part of our community who come here for a limited and temporary purpose. The example that springs to mind in connection


with students is that someone who comes here for a few years to attend an independent school or a further education college should not on that account alone gain the right to be treated as a home student if he should subsequently wish to go on to higher education here.
The Race Relations Act 1976, which was enacted under a Labour Administration, wisely recognised this situation. It thus contains provisions which allow actions that would be discriminatory to be treated as though they were not. One of those provisions—section 41—has been used, for example, to allow higher fees to be charged to overseas students in the circumstances that I have just described. Under section 41(1), acts done under statutory authority are not to be regarded as discriminatory. Under section 41(2), discrimination on the basis of nationality, ordinary residence or period of residence is permitted where such discrimination takes place in pursuance of arrangements made with ministerial approval or in order to comply with conditions imposed by Ministers. That provision allowed the Labour Administration in 1977, when the Race Relations Act came into force, to legitimate the discrimination implicit in the differential fees for overseas students that an earlier Labour Administration had first introduced in 1967.
I said earlier that overseas students are treated differently from home students in three ways. In relation to mandatory awards such treatment is covered by section 41(1). Because the rules of eligibility for mandatory awards are statutory, they are automatically exempted from the provisions of the Act. Those rules of eligibility have depended upon the test of ordinary residence, but because they are contained in regulations it has been possible to amend them without recourse to primary legislation. Those amendments are contained in the Education (Mandatory Awards) (Amendment) (No. 2) Regulations 1983, which were laid before the House on 30 March. The prayer against them in the names of the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) and others is to be debated in a Statutory Instruments Committee tomorrow morning. The same principle applies to the postgraduate awards made under the State Awards Regulations 1978.
The two other ways in which overseas students have been treated differently have been covered by arrangements for the charging of differential fees and the adoption of particular rules of eligibility for discretionary awards made under section 41(2), which allows Ministers to legitimate discrimination related to ordinary residence. Such arrangements have been approved by my right hon. Friend and his predecessors since the Act came into force. They will, however, no longer serve because they depend on the test of ordinary residence, and the interpretation now given to that test in another place will not allow Secretaries of State under section 41(2) to retain the substance of the distinctions that Governments of both parties have intended to make. This is primarily because "ordinary residence" as now defined may include residence here for the purpose of receiving full-time education.

Sir Paul Bryan: I do not think that my hon. Friend has yet said what ordinary residence means in terms of period. Is it three years?

Mr. Waldegrave: I apologise. The period is three years.
It is not possible under section 41(2) to approve arrangements which differentiate between those ordinarily resident here for different purposes. To take account of this new situation we have therefore decided to legislate to give statutory authority to the charging of higher fees to overseas students and to the adoption of limited rules of eligibility for discretionary awards, so that such practices will be brought within the scope of section 41(1) of the Race Relations Act. That is the purpose of the Bill.
The Bill creates two new regulation-making powers. Unlike most cases of the Executive taking regulation-making powers, this case will to some extent improve the accountability of the Executive to the House as the arrangements for exemption from the Race Relations Act that these regulations will replace have previously been made or approved by Ministers without reference to the House. There is not even a formal requirement that such arrangements should be notified to the House. That was the freedom of action that the Labour Administration gave themselves in these matters. From the point of view of the accountability of the Executive to Parliament, therefore, the present legislation may be regarded as a distinct advance. That consideration apart, however, I hope that the House will recognise that the urgency of this legislation and the need for consultation with the local authorities, research councils and others makes it desirable to proceed in this way if we are to have the necessary provisions in place in time for the coming academic year.
Clause 1 deals with fees. It allows the Secretary of State to make regulations requiring or authorising the charging of higher fees to those who, in convenient shorthand, I shall refer to as overseas students. The regulations will specify the nature of the connection with the United Kingdom that it is necessary for a student to have before he pays the home rate of fee. Although the detail of the regulations is still subject to consultation I can say that we have it in mind that the basic test should continue to be ordinary residence, with the meaning given to that term last year in another place. Exceptions will be specified to allow European Community students to be treated as home students for the purposes of fees and to exclude from treatment as home students those who have been in Britain only or mainly for the purpose of receiving full-time education.
Clause 2 similarly allows the Secretary of State to make regulations that will allow various bodies that make discretionary awards to students for education, training or research to adopt rules of eligibility for those awards that confine them to applicants with the specified connection with the United Kingdom. It is envisaged that the regulations will allow award-making bodies to make rules similar to those that now apply to mandatory awards, to exclude students who have been in Britain only or mainly for the purposes of full-time education.

Mr. Frank Hooley: I am not quite clear about the current academic year. If I understand the Minister correctly, all that he is talking about now will apply to 1983–84. Is the current academic year governed by the Scarman judgment?

Mr. Waldegrave: The circumstances of students who are in place in the current academic year will vary according to when they paid their fees and their relationship with their colleges. It is probably unwise for me to try to generalise about what the situation will be. If the hon. Gentleman will allow me, I must leave it at that.

Mr. Hooley: I am asking only whether the current academic year is governed by the Scarman judgment.

Mr. Waldegrave: The law between when Lord Scarman said what the law was and Royal Assent for the Bill is the law as Lord Scarman defined it. There is no question of that.
These are the bare bones of the Bill. We have already embarked on consultations about what the regulations made under it should contain and we shall, of course, take full account of the views that are expressed during consideration of the Bill here and in another place. We do, however, hope to have the Bill and the regulations in force in time to ensure that the statutory position is clear for the 1983–84 academic year. Until regulations are made, institutions and award-making bodies will have to act within the scope of ordinary residence as now defined in another place. They might otherwise render themselves liable to accusations of unlawful discrimination for acting outside the scope of the cover provided by the existing arrangements approved under section 41(2). They will be considerably inhibited and might, for example, be obliged to delay the offer of awards, which would cause considerable inconvenience to students and others.
Urgent action is also necessary because, if the present situation is allowed to continue into the next academic year, many students will receive an amazing windfall gain at the expense of the British taxpayer. Instead of paying overseas fees of from, say, £2,500 to more than £7,000 a year, they will have to pay only the home student undergraduate fee of £480. The cost could be more than £30 million a year in lost fee income alone. This is a quite unnecessary burden to have imposed on the taxpayer as the chance outcome of a legal ruling. The Government have never believed that British taxpayers should be asked to give an indiscriminate subsidy to all those from overseas who would like to come here to study. Our policy has been to end the general subsidy and to channel help to those whom a variety of national policy objectives and humanitarian reasons suggest that it would be helpful to help.

Mr. Neil Kinnock: I understand that the Bill, by secondary legislation, will provide for the continuation of the arrangement whereby EC students are home students. Is it not unfortunate to apply the word "indiscriminate" to those outside the EC who may come from poor backgrounds? I do not believe that any British taxpayers understood that, when they voted to remain in the Common Market, part of the obligation of membership would be to charge home student fees to people who are sometimes from extremely wealthy backgrounds.

Mr. Waldegrave: The trade in students in Europe is one from which Britain gains. The financing of higher education in Europe is largely done without a fee income to the institutions. It must be said that more British students go to Europe than European students come here. The matter has been discussed in the House. It was a reasonable piece of Europeanism by the Government.

Mr. Kenneth Carlisle: While my hon. Friend is dealing with the cost to the taxpayer of not passing the Bill, will he clarify one point? I understood that it might cost £50 million to the Exchequer, £30 million being lost in fee income and £20 million being spent on extra grants.

Mr. Waldegrave: We are discussing only fees. It is estimated that about £30 million would be lost in fees next year. Moreover, that money would go primarily to those overseas students who are best off. If the House chooses to put another £30 million into the overseas students programme, I do not believe that it would choose to give it to that group of people.
The Bill represents a continuation of existing policy but allows us, for the first time, to have a clear statutory basis for distinguishing between home and overseas students. I reaffirm the importance that the Government attach to encouraging overseas students to study here and, where appropriate, being assisted to do so. That is why the Government decided, in the light of last year's study by an independent non-governmental body—the Overseas Students Trust—to increase the existing provision for assistance to overseas students—which is already worth about £40 million a year—by a new programme that would provide an extra £46 million during the first three years and would be worth up to £20 million a year when fully operational.
The programme will allow 5,000 extra students to be helped to come here each year. That is in addition to the nearly 15,000 students who already receive assistance under various existing aid programmes. That is a significant response to the needs and aspirations of people overseas who would like to study here.

Mr. Hooley: The Minister should not say that there will be an extra £46 million, as £21 million of it is the allocation within the existing vote. It is an extra £25 million and it is spread over three years.

Mr. Waldegrave: I hope that I have made it clear that it is spread over three years. An extra £46 million over three years will be directed towards overseas students. I believe that the House welcomes that priority that the Government have set.
The arrangements that are being made for the allocation of those funds will allow them to be targeted precisely to serve the needs of specific groups and countries that we wish to help. The money will be part of a co-ordinated programme rather than a haphazard and indiscriminate subsidy to all corners. Details of the new provision were given in the statement of my right hon. Friend the Foreign Secretary on 8 February and in the document "A Policy for Overseas Students" which he deposited in the Library of the House two days later.
I hope that I have said enough to demonstrate that the Government's policy towards overseas students has proper regard both for the legitimate concerns of the taxpayer about the danger of indiscriminate subsidy and for the needs and aspirations of potential students whom we wish to help and encourage as part of our selective support programmes which, as we all recognise, are in the national interest as well as in the interests of those who receive assistance. This Bill will enable that policy to continue on an even keel, and I commend it to the House.

Mr. Phillip Whitehead: The Under-Secretary of State has masked, in his usual diffident manner, what he describes as the bare bones of the Bill. Bare bones indeed, and a "Barebone's Parliament" this has been. I hope that we shall examine this skeletal provision at some length both now and in Committee. We acknowledge the problems.

Mr. A. J. Beith: The hon. Gentleman should take into account the June election that we keep being promised.

Mr. Whitehead: It cannot come a day too soon for me. However, with the prospect of an imminent election, this complex problem becomes urgent and, with that in mind, the Opposition will not take a fractious view of it. We shall have an inquiring attitude and shall subject the Bill to patient scrutiny.
It may be necessary to tell a slightly different tale from that outlined by the Under-Secretary of State. The late Aneurin Bevan used to say, "Tell me your truth and I will tell you mine." The Government are in this mess largely because of the decisions of 1979 and 1980 which widened the gap between the fees paid by home students and overseas students who pay full-cost fees — that is a misnomer because universities do not charge the full cost but only the cost that the market will bear. The problem became acute for those who believed that they were in a marginal area and could claim home student status. Under two Secretaries of State there has been a policy for almost total drift, and I shall quote evidence of that in a moment.
A tale—it may be apocryphal, as are all the best stories about the Secretary of State—was retold by Mr. Simon Hoggart. The Secretary of State was seen leaping into a taxi in Brighton after a party conference, beating on the partition and saying to the driver, "Tell me where I am going. Tell me where I am going." The Secretary of State can correct me if that is not the true story. However, like many apocryphal stories, it goes to the heart of the matter. On this matter the Government have been saying, "Tell us where we should go." They asked that question of the courts, but the courts told them to go in a direction in which they did not wish to go, which is why this Bill has been introduced.
The root of the problem is the progressive discrimination against overseas students in the payment of fees and granting of awards that has developed during the years and that, as overseas student numbers grew, reached a crescendo in 1979–80. By using the emollient phrase, "Governments of both parties", the Under-Secretary of State sought what succour he could from the fact that there were developments in that direction under the Labour Government when the right hon. Member for Crosby (Mrs. Williams) and, later, others held the office of Secretary of State for Education and Science.
However, the imposition of full-cost fees in November 1979 marked the sharp end of that process. It was announced then that the subsidy, as it was called—outside the overseas aid fund—to all overseas students would end. We know the cost of that policy. It was described by The Times Higher Education Supplement at the time as a mixture of
crude financial expediency and dogma".
Even after attempts to get back on course and to put right some of the damage caused, the overall policy is still, and is seen to be here and abroad, "a disaster". Those are not my words but those of Professor Randolph Quirk speaking on this matter at Cumberland Lodge last week.
The consequence has been a massive reduction in the number of overseas students in further education. Institutions have been squeezed between home fees and the volatile market that they must tap for overseas students from countries or families that can pay the going rate, whatever it may be. That policy was condemned by the

Overseas Student Trust. The Government are now taking what comfort they can from introducing some of the recommendations of the trust, but I echo the words of my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) that the policy has not thrown much new money at the problem. It has recycled some money, and the Secretary of State said in evidence to the Select Committee recently that not much of that money, if any, came from the education budget. The money comes from other departments, as happens so often when the Department of Education and Science must acquiesce in someone else's initiatives. The policy was condemned by foreign Governments at the Melbourne Commonwealth summit by the Association of Commonwealth Universities and others, which called for the introduction in Britain of fees substantially below full cost, as defined by the Government. We all know, and I have seen in my constituency, the impact of the full-cost fees policy.
The anomalies of the policy were mentioned in an intervention by my hon. Friend the Member for Bedwelty (Mr. Kinnock). If he is believed to be a partisan witness on this matter, may I tell the House that the "Secretary of State for Southend"—the hon. Member for Southend, East (Mr. Taylor)— intervened during Question Time recently to ask why a student in Britain from French Guyana pays fees of only £400, but a student taking the same course who came from what used to be British Guyana and is now the Republic of Guyana pays more than 10 times that sum. Those injustices have made the dilemma that we face today even more acute.
I hope that I shall have the opportunity, with the leave of the House, to reply to the debate because I wish to talk further about retrospection when we have considered more carefully what the Under-Secretary of State said. Suffice it to say now that, having heard what he said, there is some retrospection in this legislation. The hon. Gentleman spoke of "casting a gloss" on interpretations of the Government's response to the Scarman judgment. However, the way in which the Bill sets out the fees policy seems to show some retrospection, which will be very unfair to students who have been here during the period between the introduction of the full-cost fees policy and the Scarman decision and any subsequent legislation.
With soaring full-cost fees, it was abundantly clear that ordinary residence had become crucial for many students and potential students some years ago. The Select Committee on Education, Science and Arts—I am glad to see that the chairman of that Committee is here—

Mr. Christopher Price: There are three members of the Select Committee here.

Mr. Whitehead: I am glad that the members of the Select Committee, who were unanimous in their recommendations on this matter, are here to draw attention to what was said by the former Secretary of State, the right hon. and learned Member for Runcorn (Mr. Carlisle), in 1980. A Department circular on ordinary residence published then quoted that great legal authority Mr. Justice Karminski, who has now been laid aside or perhaps replaced by a greater legal authority in the shape of the Secretary of State. The Karminski judgment and other matters that were drawn to the attention of local education authorities by the Department did not stand up as an all-embracing definition of "ordinary residence". However, the Under-Secretary of State for Education and Science


who was then responsible for such matters, said in 1980 that after 1 September 1980 students starting new courses would be classified as
home students only if they had been ordinarily resident for three years prior to the start of their course. It is not possible to give a definitive definition of the term 'ordinarily resident' since the question of whether a person is ordinarily resident in a particular place could involve a wide variety 'of factors. In simple terms"—
he said in his layman's language—
it can be said that a person is 'ordinarily resident' in a place if his home is there.
That definition was picked up by the Select Committee, which on several occasions warned the Secretary of State that we needed a new definition of "ordinary residence". On each occasion, and in response to the interim report, the Department told the Select Committee that further advice would be offered as necessary, taking into account cases recently determined in the courts. There was a further response on this issue at the end of the year when the Select Committee said:
We reiterate our former recommendation with greater urgency".
However, no response came from the Department of Education and Science, which waited upon the courts.
It has taken two and half years for the courts to reach a decision. I understand that the Department has been thrown into some confusion by the Scarman ruling, which among other things, picked up a piece of onerous legislation in which the interpretations of residence were so defined that they might distinguish between categories of person of immigrant origin. That showed that the Immigration Act 1971 used "ordinary residence" to denote something very much less than the right of abode or settlement. It showed that ordinary residence could be seen to have a normal role and could be normal residence in Britain without being acceptance for settlement. Lord Scarman concluded that the applicant had to show that he had
habitually and normally resided in the United Kingdom from choice and for a settled purpose throughout the prescribed period, apart from temporary or occasional absences … An authority is not required to determine his 'real home', whatever that means".
I take the Scarman ruling to be the ultimate response, as settled in the courts and, I hope, accepted on both sides of the House, to the definition of "ordinary residence". That is not where the home is or was, and it is not where the predominant home is. It is the place where, for the preceding period of years, the person has been. I take it that the Government accept the Scarman definition and do not intend retrospectively to change it. I accept that they have been thrown into disarray by it and further delayed, as we understand, while they have weighed the chances of getting away with retrospective legislation. The Under-Secretary of State shakes his head unconvincingly, but that is the only explanation that I can offer on the Department's behalf. Those who have been waiting at the door of the Department over the past four months — universities, colleges, CLEA, the LEAs and individuals—have been told that there is no advice for them and that consultations are still taking place.
At the end of the Session before the Easter recess the Secretary of State pronounced on the regulations that had been laid, which provided for the repayment in some

circumstances, as I understand it, of mandatory awards to persons who had failed in their claims to local education authorities for such awards.
We now have an attempt to return not to the status quo ante but to the law as we all thought it to be. This is being done in an attempt to get away with telling these students, irrespective of when they came here, that their fees will not be paid. I understood the Under-Secretary of State to say that they came to Britain not expecting their fees to be paid. I remind him that many of them came here thinking that they would not have to pay the sort of fees that were subsequently levied. I shall be interested to hear what he intends to say to the students—there are quite a number of them—who arrived here well before the switch to full-cost fees, who went through the three years of residence and who have since been in courses of higher education, for which they are now, I assume, to receive back their awards, or to receive for the first time a mandatory award to cover the years under the statutory instrument that is to be debated tomorrow. As I understand it, they are not to receive anything by way of fees. Is that the position?

Mr. Waldegrave: It will depend on the specific case and the relationship established between the college and the individual in a particular case. It must be for the college and the individual concerned to examine all the circumstances of the case. But fees are not in the same position as awards, as I am sure the hon. Gentleman is aware. If a student is given a mandatory award for part of a course, he is given it for the whole of the course. The position over fees is not the same.

Mr. Whitehead: I cannot say that I have been greatly enlightened by that answer. It assumes an area of discretion for the institutions concerned which it seems that they will not have when the Bill is enacted. The Bill seeks to confer great powers upon the Secretary of State and the Department over an area of local government. I do not believe that there is the discretion to which the hon. Gentleman has referred.

Mr. Waldegrave: I did not mean to suggest that the interpretation of the law will be a matter for the discretion of the colleges, but facts of particular cases may be. Awards and fees are different. Under statute, a mandatory award for any part of a course is an award for the whole of the course.

Mr. Whitehead: This is an issue to which we shall have to return. The dilemma in which many overseas students have found themselves over the past few months will be made worse by what they will read in the Official Report tomorrow morning. I hope that we can clear up the matter before the debate ends.

Mr. Hooley: Another category of students has had its expectations dashed. I refer to the students who were here for three years up to 1983–84, who certainly expected to have to pay the full fees until they heard the Scarman judgment. Having heard that judgment, they expected that it would be honoured, but it now seems that that will not happen.

Mr. Whitehead: I entirely agree. If we are to consider the impact of the Bill case by case, we shall have to examine the draft regulations as well as the Bill. The Bill


is bringing the fee arrangements into line with the mandatory award arrangements, except that both sets of arrangements will be different.
What will be the result of this enabling Bill? It is not possible now to have a satisfactory debate on this very short measure, which is, in effect, a two-clause Bill. We must know something about the regulations that it foreshadows. This is a clear example of the need for real scrutiny to take place in Committee with the draft statutory instrument before the Committee, irrespective of whether the Bill is considered by a Special Standing Committee that has the opportunity to hear witnesses. The effectiveness of our consideration of the Bill in Committee will depend on our getting the draft regulations and being able to examine them as thoroughly as if they were schedules to the Bill.
If there has been no debate within the Department on retrospection over the past four and a half months, I hope that the Under-Secretary of State will tell us when he replies what the Department was discussing. Why was there no consultation? There has been hardly any consultation since the Bill was published a few days ago. I appreciate that there is the need for haste because of delays that have not been of the making of the House. Responsibility for the delays lies with the Department. We know that CLEA approached the Department in January and asked for advice. It drew attention to many of the problems to which my hon. Friend the Member for Heeley has referred. It stressed that students in many institutions would be placed in an impossible position because they would not know, and their institutions would not know, what sort of fees they would be charged and what awards they might receive. In other words, they would not know the conditions of their continued periods of study. Those representations were being made three or four months ago and there has been no consultation.
Overseas students who believed that they would benefit from the Scarman judgment were led along in that belief by the way in which the press, without sensationalising the issue, covered Lord Scarman's obiter. Newspaper reports were akin to "Law Lords' £20,000 Christmas gift for students." Anyone who read those reports at the end of last year had to sweat for five months on that form of coverage with nothing from the Department but an embarrassed silence. Local authorities consider, with some reason, that the regulations and the Bill discriminate against them. Universities and direct grant institutions will be recompensed for their loss of income but no such undertaking has been given to the local authorities. In the course of the debate, I trust that those undertakings will be given to the local authorities. Once again, local authorities must reflect that this bare bones Bill removes further powers from them, which are assumed by central Government under clause 1(3)(b) and (c).
As a result of the Under-Secretary of State's asides and interventions, I am interested to know what powers of compulsion the Bill is intended to provide over local education authorities or educational institutions. What exceptions do the Government have in mind in the Bill? There is a specific reference to exceptions. Will the exceptions further widen the definition of non-home students either now or in the future because the Government are alarmed that there are too many students, or are they making future provision for further categories of exemption from full cost fees?
What will be the position of recently arrived bona fide immigrants under the Bill and regulations? Currently, many immigrants who have waited for five or 10 years, or sometimes even longer, in the quota queue for settlement in Britain, then have to wait for financial support for a further three year period. The Government have the opportunity to be generous. Under the new definition of ordinary residence, such people will be in a different category. They will not be people who are in Britain purely or largely—the Bill is ambiguous on this matter—for the purposes of study. They will be here to settle. If that is the case, the Government could be generous. The total immigration quota each year is no more than 23,000, of which a tiny category would present themselves for education. Those are people whom we should and could help, if the Government take a generous interpretation of the Scarrnan judgment, by saying: "If Scarman is to be used properly, it should be used to help those most in need and not as a means of giving an unsolicited and unexpected gift to rich people who arrive here — who went through public school — with the intention later of qualifying for home student status I accept the aside made by the Under-Secretary on that subject.
A blanket payment would be made to people who have attended some form of education in this country prior to higher education, which would not necessarily be desirable. Immigrants who come to this country for settlement are not in that category and suffer an unconscionable delay before consideration for home student status.
Assurances were sought for several other special categories in the House on 30 March, and have subsequently been sought in representations to the Department. These are people currently engaged in full-time study, who arrived in Britain as political refugees or who have not sought political asylum but who have for one reason or another special permission from the Government because of the political position in their own countries. If the term of residence of those people goes to three years or beyond, will they be considered as home students or will that period of residence, which was in a sense enforced, be counted as education, wholly or in part and therefore exclude them from home student fees?
What is the position of returning residents who have been out of the United Kingdom for a long time who find that they may be in difficulties because of new interpretations the law? What will be the position of students transferring from one course to another, when they took up a course between 1979 and March 1983, who now receive a mandatory award under the regulations—if they claim it — but are moving on to a period of further study? Will they continue to be given home student status or will they not have that status for any further period of study upon which they embark after 30 March?
The Opposition wish to be informed whether the research councils will be restricted in their powers to make discretionary awards under clause 23. Traditionally they never have been, although they have kept in line with other award-making bodies. There is a power under the Bill further to restrict such councils to a degree which has not previously happened.
The Under-Secretary has talked about the eligibility of students with a specified connection to the United Kingdom, and what can be described in "convenient shorthand" as overseas students. That is not good enough.


One man's convenient shorthand is another man's obfuscation. The problem with a definition of overseas students is that it is so diaphanous that it is extremely hard to see whether there is—it is hoped the legislation will give it— a correct and all-embracing definition of an overseas student. I wish the Under-Secretary, when he replies, correctly to answer the question — unlike the Prime Minister yesterday. What is an overseas student? The Opposition wish to hear that definition given to the House now and then build upon it in Committee.
The post-Scarman period could have been an opportunity for generosity by the Department of Education and Science, to diminish the heavy charges levied on overseas students. Whatever its precise interpretation of the Scarman judgment, it could then diminish those anomalies and injustices that led to the pressure, which in turn went to the courts and resulted in the Scarman judgment. There could have been an opportunity to build on the positive aspects of the Scarman judgment and to get a workable definition of "overseas students" which has not yet come from the Government. It could still be an opportunity to extend to immigrants — in terms of the new definition of residence which the authorities are beginning to enforce—the opportunity for home student status and to widen the category that is exempt from full-cost fees and follow the comparatively modest FCO initiative in these matters.
When the Secretary of State and his officials are faced with the possibility of taking initiatives, they tend, first of all, to count the cost and then count the ideological cost. When those two are added together, all too often a niggardly attitude develops. That attitude has occurred in all areas where the Department of Education and Science ought to relate to other Government Departments. Little response has come from the DES to repair some of the damage to overseas students which the Foreign and Commonwealth Office had to do. We have seen areas of activity for young people in this country taken out of the hands of the DES and the initiatives, such as they were, coming from the Department of Employment—

Mr. Kinnock: And industry.

Mr. Whitehead: Will the Secretary of State take the initiative and show some generosity? When he had that opportunity in the past he usually turned it down. If I were giving a teacher's progress report on the Secretary of State I think I would say that he has pretty much messed things up. In the words of the old report by the craft lecturer, "Give him the job and he will finish the tools."
That has been one of the problems of the Secretary of State throughout his period in office. I trust that further consideration of this important matter will not merely be left to the House but will include a detailed Committee stage. I hope that there will be a fresh approach and more generous thinking following a general election.

Sir William van Straubenzee: I feel sure that I speak for the whole House when I thank the hon. Member for Derby, North (Mr. Whitehead) for quite one of the nicest jokes that I have heard for a very long time. Even if the rest of his speech is not remembered, that will be. Perhaps I could give an end of term report on his speech. I mean it in the nicest possible way when I say that

it was a very skilful contribution — as the hon. Gentleman's contributions usually are—and was made by a parliamentary cat walking on eggshells.
Unlike most Opposition spokesmen, the hon. Gentleman did not at any point outline the Opposition's approach to the Bill. On such occasions, the Opposition spokesman invariably says, at least towards the end of his speech, that the Opposition will vote against, or in favour of, the Bill. However, I listened to the hon. Gentleman's speech carefully. We went through the pluses and the minuses, but there was no intimation of the Opposition's attitude to the Bill. That is rather curious.

Mr. Kinnock: rose—

Sir William van Straubenzee: Does the hon. Gentleman want to come clucking to the rescue of his chick?

Mr. Kinnock: I distinctly recall that the hon. Member for Wokingham (Sir W. van Straubenzee) was in the Chamber at the beginning of the speech made by my hon. Friend the Member for Derby, North (Mr. Whitehead). I am sure that he enjoyed it as much as I did. I did not time it precisely, but my hon. Friend, between the second and third minutes of his speech, told the House precisely what the Opposition intended to do about the Bill. We shall not vote against it tonight, because we recognise that there are various considerations, but we shall give it careful consideration in Committee. If that is not a direct and specific approach, I do not know what is.

Sir William van Straubenzee: In that case, we shall have to look at Hansard carefully. I do not know about my right hon. and hon. Friends, but I did not hear that sentiment being expressly stated. However, I am sure that we have been greatly helped by the remarks of the hon. Member for Bedwellty (Mr. Kinnock).
I had also expected to hear a fairly clear statement of policy on the principal issue. If elected, would a future Labour Government restore home student fees to "overseas students", as we understand that phrase? It is all very well to talk of lack of generosity. However, it would be not only helpful but appropriate to have a clear statement of the Opposition's policy. The difficulty did not begin in 1979. In 1967, I spoke from the same Dispatch Box as the hon. Member for Derby, North has spoken from tonight. That was when the difficulties began. The then Labour Government distinguished between home and overseas students. As hon. Members know, it is very rare that I get anything right, but for once I think that I got things right. I pointed out that that was a key moment. The measure was piloted through the House by one of the nicest Members of Parliament to have served in the House, the former right hon. Member for Caernarvon, Mr. Goronwy Roberts as he then was. He became increasingly uncomfortable about it, because he recognised what he was doing.
We must firmly nail the idea that this affair started in 1979. The record shows that, doubtless under pressure from successive Treasuries, successive Governments have increased the fees charged to overseas students. I accept that it happened to be a Tory Government that finally charged fullcost fees, but I assert—although I can never prove it—that if the Tory Government had not done it, a Labour Government would have done it.

Mr. Christopher Price: You will remember, Mr. Deputy Speaker, as well as I do, the speech made by the


hon. Member for Wokingham (Sir W. van Straubenzee) from the Opposition Benches. At the time I was sitting on the PPS Bench, behind the late Mr. Crosland and Lord Goronwy-Roberts. I am sure that the hon. Gentleman will accept that he was even less specific about the Conservative party's policy than he would have us believe my hon. Friend the Member for Derby, North (Mr. Whitehead) has been about the Labour party's policy.

Sir William van Straubenzee: There was a substantial reason for that. I was only the minor, junior spokesman. That point was dealt with by those who led at the time. I am afraid that the name of the hon. Member involved has slipped my memory temporarily. The record shows that that point was rightly dealt with by the Opposition's principal spokesman at the time.
The present Opposition have no jurisdiction in this matter. In a society such as ours, the judicial decisions of the other place are exceedingly important. They must be observed. In its judicial capacity, the other place has ruled.

Mr. Hooley: I have much sympathy with the hon. Gentleman's earlier point, because, for the first time in my parliamentary life, I voted against a three-line Whip on that issue in 1967. The decision in 1967 was a serious error of judgment. However, the hon. Gentleman cannot claim that the Labour Government's actions bore any resemblance to the subsequent actions of the Conservative party. If he does, he will have to explain why the worldwide fury that greeted the actions of this Government was not in any way replicated between 1967 and 1979.

Sir William van Straubenzee: The hon. Gentleman has surely forgotten something. I believe that the largest percentage increase ever made in fees for overseas students was imposed by a Labour Government. I should like to look up the figures, but I think that the hon. Gentleman will find that to be so. Of course, there were violent protests every time Governments took such action. The truth is that both the major parties are in this together. The country having embarked upon that course, there was a good reason to restructure the way in which we finance our support for overseas students. I was keen to do that more than 10 years ago. It is a strength, not a weakness, that a substantial amount of the money comes from other sources. We have wisely been reminded of the Government's response to the important report from the Overseas Students Trust, the £46 million available over a period and of the 5,000 or 6,000 additional students thereby brought to Britain. However, the point is that they have not been brought here indiscriminately. It should be done, not indiscriminately, regardless of country and background and the rest, but in a more fair and discerning way than it was done before.

Mr. Kinnock: Is not the hon. Gentleman unhappy with his general attitude, which we respect, of agreement with the criteria announced by the Secretary of State for Foreign and Commonwealth Affairs, that the estimated 5,000 or 6,000 students should serve British interests in coming to Britain for their higher education?

Sir William van Straubenzee: It is not a bad thing when operating an overseas aid programme to have due and proper consideration for British interests. British interests are world-wide, which gives a wide definition to "interests". We should not wish to narrowly interpret it, as the French do, as the House knows.
I am sure that my experience is not exclusive to me. We are representatives and not delegates, and have to argue the case with those who send us here—properly so in a democracy. The cause of the overseas student is a minority cause among the electorate, which has to be argued, explained and fought for. If those who send us here think that the money that they provide is used indiscriminately, regardless of British interests, our case for securing the necessary finance is weakened. In a democracy, securing finance is a large part of what we do.
I profoundly believe, as the House knows, that we have nothing short of a moral duty to share some of our educational wealth with students from countries much less fortunate than ourselves. However, I have always been conscious of a deep duty to the British taxpayer, who provides the money and expects us to spend it on a rational and not an indiscriminate basis.

Mr. Martin Flannery: I share the hon. Gentleman's dilemma in not knowing what my colleagues will do. My hon. Friend the Member for Derby, North (Mr. Whitehead) did not make our position clear. He said that we would not vote against the Bill—I wish that we were to do so — and that we should pursue the Bill in a spirit of inquiry. However, I cannot understand the hon. Gentleman's point about arguing for giving this money to overseas students. His implication is that hitherto the case was not accepted by the British people and we now therefore have to cut the money. Will he kindly prove to us that the British people were in an uproar against foreign students and that as a result of that we have had to cut the money we give them? Is it not the case that, as there are cuts across the board being enforced by the Cabinet and the Prime Minister, we are cutting these grants and losing much sympathy throughout the world because we seem to be victimising the poorest overseas students, whose culture was helping us in many ways?

Sir William van Straubenzee: I did not expect to find myself grateful for the powerful support of the hon. Gentleman, but I am grateful for his support for my initial contention. I am sorry that he has sent a shot across the bows of his Front Bench.
As to the hon. Gentleman's second point, I am making a simple assertion, which has applied over a number of years and has nothing to do with what may or may not have happened in 1979. The case for making places available in our institutions of education, particularly those of higher education, for overseas students is one that has constantly been fought for, pleaded and discussed. It is not one—I cannot prove this but I believe it—of which the vast majority of our constituents warmly approve. However, our constituents are susceptible to leadership, and leadership is a requirement of being a Member of Parliament. Therefore, these things must be done rationally and not indiscriminately.

Mr. Whitehead: Why does the hon. Gentleman have such a curiously distant view of the electorate? What would he say to those of my constituents who find their jobs and livelihood in the railway workshops in Derby imperilled because orders from Malaysia have been cancelled to show that country's disapproval of the Government's full cost fees policy? Does he not see that many British people make both the moral and practical


judgment on this issue which would support those hon. Members who have throughout condemned the full cost fees policy?

Sir William van Straubenzee: I should point at once to the enormously improved relationship between Britain and Malaysia and to the substantial number of students who continue to come here to places such as UWIST in Cardiff where the number of Malaysian students continued to increase even during that period. I should go on to point to the large number of students at sub-degree level. We often overlook the massive contribution that is made, particularly by the further education sector, in assisting students at sub-degree level.

Mr. Whitehead: It has been cut in half.

Sir William van Straubenzee: It is still massive, and, incidentally, the private sector plays a major role here. I should also point to the foreign policy and commercial interests that follow.
I took the hon. Gentleman's intervention to mean that he believes that we should go back to pre-1967 so that all foreign students are put on an equal basis.

Mr. Whitehead: No.

Sir William van Straubenzee: I should be grateful if the hon. Gentleman would be much more explicit than he has been in saying precisely what he would like to do in replying to the debate.
I want finally to raise a technical point that has always been a hobby horse of mine. It is simply to say how often successive Governments run into problems because of difficulties with the law. One can think, particularly in the Department of Education and Science, of problems that confronted the last Labour Government and which have certainly also dogged this Government. I have often felt that government is much too narrow in the sources from which it takes its legal advice. Successive Governments would have avoided considerable difficulties if it had been part of Government practice to take advice from the wide number of people who are available on a confidential basis to the ordinary person, and certainly to the Government, rather than confine themselves only to those who are in Government service. I make no criticism of the individuals concerned— to do so would be unfair and unreasonable. I make the point as one of principle. One day I hope that we shall see Governments, preferably of all colours, shopping around for legal advice.
Having said that, the Government are right — although I understand the point about the grey area which can be explored in Committee— to accept the judgment of another place in its judicial capacity without retrospection but to say what the ordinary man believed the law to be and that it was right and proper to make the law conform with that understanding. That is why I shall vote for the Bill tonight.

Mr. A. J. Beith: I begin with a complaint about the way in which the Government have brought the Bill before us. It is a short Bill, I readily admit, but it is complex in its implications and effects on many people in whom many organisations take a proper and careful interest. The Bill has not had the usual full week and two weekends' consideration. It was printed last

Thursday and it has been brought before the House today. That is not the proper way to proceed. The long-standing convention in the House is that a Bill is available for two weekends and the intervening week before Second Reading. Only strong overriding emergency circumstances should change that.
The Government may say that the measure is urgent because local authorities and institutions need to know what is to happen. The way to solve that problem is not to deal with the Bill in haste, but to have presented it earlier. The result may be a longer Committee stage, because insufficient consultation has taken place before Second Reading, but the Government will not have saved those involved any time at all. I criticise strongly the breach of the two-weekend practice. It is a breach of a valuable precedent, which the House should guard jealously.
The Government's policy on overseas students involves a history of mistakes and decisions which have been very damaging to our country's interests. I need look no further for a simple and eloquent testimony to that than the first report from the Industry and Trade Committee which sums up the situation well. The Committee members went to the far east to consider trade issues, but they said:
The single issue most frequently raised, both in South East Asia and in Hong Kong, was not a normal trade matter at all, but one which we are in no doubt has trade implications far beyond normal tariff or non-tariff barriers: it was the issue of the UK's changed policy on the fees of overseas students. The London Chamber of Commerce and Industry and many others … stressed the long-term trade benefits to the UK of training foreign students in UK educational establishments … They argued forcibly that the effect of the present Government's increase in students' fees 'whatever the rights or wrongs of the argument may be … [had] been the loss of considerable amounts of business and may well have created a political climate, notably in Malaysia, to our disadvantage over the years ahead, far outweighing the money saved'.
Both parties were represented on that Committee and Government Members were in the majority. The Committee also said that the policy was "inept". It said that
it was contrary to the UK's best interests.
I agree with the aside by the hon. Member for Wokingham (Sir W. van Straubenzee) that the concept of British interests, as most of us hope that we understand it, is wide enough to embrace objectives for overseas students policy which go far beyond what the Government have done and is different from that which is implicit in the Government's decision to charge fees for overseas students.
The damage is considerable and I fear that some of it is irreversible. That is because of the general psychological impact of a decision which is so inimical to the poor in the Commonwealth. They feel kicked in the teeth. When that happens, relations are not easily restored if the person who delivers the kick in the teeth returns some months later and says that he is prepared, under certain conditions, to contribute to the cost of a set of new dentures to replace the gap that he has created. The effects of such a cataclysmic decision cannot be easily redressed even by a near-total reversal of policy.
The Government's statement and the commitments involved are not enough to restore the good feeling that existed between Britain and so many of our Commonwealth partners.
A secondary type of damage is created by the new patterns which students, their families and Governments in the Commonwealth and Third world have had to


establish in the interim so that students had somewhere to go while they waited to see whether the British Government would change their policy. Some students have gone to other countries and established new patterns of higher education with other providers, including some in eastern Europe. It will be difficult to repair that damage. The precise implications of the Bill may be limited, but we must view it against that background.
Amendments are necessary to pave the way to an acceptable overseas students policy. The Bill's main weakness is its vagueness and the provisions that it leaves out. Many issues are left to regulations. In practice that means that statutory instruments subject to the negative procedure are to be used. It means that the Government will come before the House with a set of regulations which define much more clearly the real issues about which we are all concerned. Hon. Members will not be able to amend those regulations. If they find that one category is omitted, they will not be able to have that category included. If they find that a definition is faulty, they will not be able to have it modified. More than that, they may not be able to secure a debate on the issue on the Floor of the House and they certainly will not be able to secure a Division.

Mr. Waldegrave: Does the hon. Gentleman agree that, under the previous Government, supported for a time by the Liberal party, even that capacity was not available to the House? I do not remember the Liberal party raising the issue of the exemptions given under the Race Relations Act 1976, which is how the matter has been dealt with before, which gave the House no status whatsoever. I do not remember that being said.

Mr. Beith: The Minister must know that, during my time in the House, I have been a constant critic of the negative procedure which prevents us from doing anything to regulations and orders. The Minister is right to say that features in the Bill, because they differ from the Race Relations Act, will bring certain matters before the House which would not have been brought before it, but bringing matters before the House in this way is little more than a nominal procedure. I regard the negative procedure as affording the House no more than an opportunity to criticise Ministers, very often only in Committee and not on the Floor of the House.
My main criticism of the negative procedure is not that many of these debates are taken in Committee. My criticism is that, at the end of the day, there is no means by which Members can secure a Division. Let us consider the position of an hon. Member who is critical of some features of regulations. His first problem is that, even if he could vote against them, he might not wish to vote against the good features of the regulations in order to deal with one bad point. The regulations might contain five categories of students to whom he thinks special provision should be extended but omit one category. If a Division was available to him, he would be able only to vote against all five for the sake of the one, because there is no way of amending the regulations.
Under the negative procedure, if the matter goes into Committee, there is no Division at all. The only Division that can take place in Committee is on the proposal that the Committee has considered the statutory instrument. As hon. Members know, even if the Division goes against the Government, it is still faithfully reported to the House that

the statutory instrument has been considered by the Committee. There is no Di vision on the Floor of the House and therefore there is no means of challenge. It is therefore an inadequate procedure by which to deal with an issue as fundamental to the individual as whether he will be able to get a course of higher education, particularly when the issue involved is the definition of categories of students. That is why, when an opportunity presents itself, I will want to change that part of the Bill so that the statutory instruments are subject to an affirmative procedure.
I am also led to argue that much more could have been included in the Bill itself, so that we could assess here and now whether the range is adequate, and amendments could be made. In many situations the Government accept and welcome redefinitions of categories which have proved during discussion in the House not to have been adequately worked out at the beginning. We cannot do that with the procedures offered to us. Unless, as the hon. Member for Derby, North (Mr. Whitehead) suggested, we have the regulations with us in Committee and can go through them in immense detail, we will have no chance effectively to influence those crucial decisions.
Clause 1 refers to a student's connection with the United Kingdom. A number of groups could make a strong claim for having the nature of their connection spelt out in the Bill rather than afterwards. One such group, about which the Government disagree with Opposition Members, is students from British dependent territories. As a firm supporter of British membership of the European Community, I still find it indefensible that a student from what is in effect a French dependent territory is charged a fraction of the cost of a student from a comparable British dependent territory. There is also a comparison between French overseas territories and British Commonwealth countries, but the comparison between British dependent territories and comparable parts of the French overseas departments is even more striking. The Government must think again about the small dependent territories, which still have a relatively close relationship with this country and in most of which there is no alternative provision for higher education.

Mr. Christopher Price: The Falkland Islands.

Mr. Beith: The Chairman of the Select Committee mentions the Falkland Islands. That is an obvious case. It is noticeable that the Government gave citizenship to the Falkland islanders only in the aftermath of the fight for the very freedom of those inhabitants.
There are refugees under the United Nations convention, those granted asylum and those awaiting, a decision on asylum, all of whom we should consider more carefully. There are people granted exceptional leave to remain in the United Kingdom. In recent years, Poles, Afghans, Ugandans and Iranians have for special reasons been granted rights to remain in the United Kingdom. Their lives have been disrupted, but in almost all cases they do not have the means to proceed through higher education at high cost, even though they have a good case for doing so.
There are also children of diplomats, returning residents, children of expatriate Britons in the public service, the services and commercial and other work overseas, whose connection with the United Kingdom is clear, although it is not necessarily embraced in the Bill. Once again, that should be spelt out more clearly.
There are those who have proved their connection with the United Kingdom by virtue of being permanently resident for non-education purposes for three years. There are recently arrived immigrants— for example, from the Indian subcontinent. There is a special problem in that regard which the Government must consider. The quota queue on the Indian subcontinent is extremely long. If someone has waited seven years to come here, why must he wait a further three years to qualify for admission to higher education when it will be clear by that time that he wishes to take up permanent residence in the United Kingdom? It is an unreasonable imposition if the effective qualifying period is as long as that.
Clause 1(2) allows for
different provision for different cases or purposes".
That is an intriguing phrase which could cover a multitude of Government sins or herald a sensible approach to overseas student fees. I agree with those hon. Members who have argued that, if limited resources are available, we may have to be discriminatory in the way that they are allocated to overseas students so that we assist most of all poor students from poor countries, students whose links with the United Kingdom it is particularly desirable to foster, and students from countries towards whose development Britain feels a special responsibility. There are a number of categories for which we should do more, and we should use the clause for that purpose.
So far the evidence is not encouraging, and we need a more positive commitment from the Government. They still seem to be taking half a step back from the disastrous position that they adopted over their earlier decision on full-cost fees.
Clause 1(3) and (4) have a different impact in that they relate to charges made to overseas students for things such as halls of residence. Those provisions appear to buttress the iniquitous manner in which overseas students are treated in some halls of residence in some public sector institutions of higher education. A recent National Union of Students survey shows that many differential charges are imposed on overseas students for their residence costs in public sector institutions, ranging from 17 per cent. at Hatfield polytechnic to an astonishing 181 per cent. at Portsmouth polytechnic. I suppose that that is an outcome of the impossible budget-balancing exercise in which many polytechnics hve become involved in an attempt to maintain their residential facilities. These provisions will add another tier of discrimination which in some cases is particularly heavy.
We are talking about an absolute level of charges that is often very high. There is no agreed formula for calculating the charges, which include elements for utilities, porterage and maintenance. They vary greatly between institutions and are another element in cost discrimination against overseas students in which the Government should take a more careful interest. I am worried that these provisions will simply buttress that practice.
Clause 2 has a different effect. It relates to discretionary awards, and little is likely to be said about that provision because I know of few local authorities which are granting discretionary awards to overseas students, or indeed to anybody else; discretionary awards are scarcely available to home students, including for a wide range of important courses, so the effect of clause 2 will be negligible. It is

probably legitimising the present position in which most local authorities say, with even more speed and expedition to overseas students than they say to home students, "There is no money in the kitty. There are no discretionary grants available." But the broad provisions of the clause are still subject to some of the same criticisms which I applied to clause 1.
I agree with the Under-Secretary that not to pass the Bill would be to ensure that the limited additional assistance involved— he spoke of £ 30 million— might go to a group who include many of the les needy and less deserving overseas students— those, for example, who have been able to afford to establish a period of residence here by attending fee-paying educational institutions, whether public schools or private sector colleges of various kinds. I make no criticism of them for doing that. Indeed, it was a sensible decision for many of them to take, coming, as many of them do, from wealthier families in the wealthier countries from which students come here.
Bearing that in mind, the assistance that we have available needs to be channelled to other groups than some of them, and therefore I do not dissent from the need to introduce legislation dealing with these issues. But I criticise some of the detail of it and I share the criticism of what we may call the element of retrospection— or at least the impact of the Bill— on those who have already entered on courses with an assumption — which has certainly existed since Scarman— that the fees would not be grotesquely high and, in many cases, an assumption, dating from before the Government's change of policy, that they could complete higher education in this country at reasonable cost.
Both of those assumptions would be completely knocked away if the Government were to apply, as they seem to intend to do, the provisions of the Bill to those already entered on courses. The Bill should apply to those beginning courses in the forthcoming academic year and not to those who have already entered on them. I would support attempts during the proceedings on the Bill to confine it in that way.
Some aspects of the Bill could be used to make more intelligible the policy of this country towards overseas students. It is a policy of tremendous importance which the public understand better than the Government give them credit for. Many people have reason to know how much former students who studied here have contributed to the long-term good of Britain and the countries to which they returned. There is widespread understanding that it is valuable for British students to be educated alongside those from other countries, and there is far wider public understanding of the value of overseas students, particularly from poorer countries, in our institutions than Ministers recognise.
Further changes of policy to get back to a more sensible approach, one which would do Britain long-term good, would be more widely supported than the Government recognise. It is an approach which my hon. Friends and I take and we shall seek to use the Bill to further that objective.

Mr. Tim Brinton: Back in 1980 there were inevitable signs that this debate would be taking place about now. I cite as my evidence for saying that the interim report of the Select Committee on Education, which was laid before the House on 16 April 1980. That


looked into the funding and organisation of courses, in particular the question of an interim report on overseas students' fees being made.
It was clear in that report, to which I subscribed, in paragraph 45 and ensuing footnotes, that the definition of "ordinary residence" was in a state of considerable muddle. Our report said:
In approving the new arrangements for overseas students in January 1980 in pursuance of Section 41(2) of the Race Relations Act 1976 the Secretary of State amended the definition of an overseas student in such a way that some applicants who would have qualified for 'home student' status for fee purposes will no longer do so. The new definition for the purpose of these arrangements— and hence for the policy of charging full-cost fees — is ' … any person who has not been ordinarily resident in the United Kingdom, the Channel Islands or the Isle of Man throughout the period of three years immediately preceding the date that his course is, or was, due to begin'.
That was one shot at it. The footnote contains another with which I shall not detain the House but which makes life more complicated.
The next paragraph of the report states:
Asked if he thought that further guidance was likely to be given to institutions on the meaning of 'ordinary residence', Mr. Thompson of the DES said 'I do not think so. This is a matter which has to be settled ultimately through the courts and that administrative advice is not in point.
There was a clear forecast that at some stage, thanks to the Government's policy on overseas students, which I fully support, the matter had to be placed before the courts. That is why, after the Scarman decision has been made and deliberated upon, we are considering the new Bill.
The problem of overseas students coincides with many other debates in the House concerning the problem of subsidy. I personally believe that while Governments must support those who cannot support themselves in education or in any other matter, subsidy now distorts and falsifies. This is a prime example. The hard-pressed taxpayers and ratepayers believe that the money that they have contributed to the education of people in this country should be used for them. However, a portion is spent at the Department of Education and Science on overseas students. The diversion made by the Government for some of that money to come out of the budget for the Foreign and Commonwealth Office makes sense. I wish that the Department of Education and Science had nothing more to do with the financing of overseas students. That is a different responsibility in the context of government. To avoid distortion, it is correct to say that the full fee is the normal fee. Then one can create scholarships and bursaries for those who need them and need to come to this country. Those are the steps that the Government seem to be taking. They are going in the right direction.
My hon. Friend the Member for Wokingham (Sir W. van Straubenzee) said that we are not the only Government who have raised overseas student fees. In the report from which I quoted there is a table that shows that, during the period of office of the Labour Government, overseas students in the year from 1976–77 to 1977–78 almost doubled. Postgraduate fees rose from £595 to £ 1,080 and undergraduate fees rose from £ 595 to £ 825. That is an example of how in this matter the Government are not necessarily the baddies and the Opposition the goodies who wish to lavish money on overseas students.
I believe that at heart, as my hon. Friend the Member for Wokingham said, the people have to be persuaded that their money is being spent wisely. It is not, as the hon. Member for Berwick-upon-Tweed (Mr. Beith) suggested,

something that they fully understand. I fully support our making a contribution to world education and gaining in our trade by fostering students in the universities and colleges in this country, but we should do so sensibly and economically because, at the end of the day, we are aiming at spending prudently the great contributions by our taxpayers and ratepayers. I look forward to supporting the passage of the Bill.

Mr. Christopher Price: I must begin with a complaint about the pace at which the Bill has been brought in. The hon. Member for Berwick-upon-Tweed (Mr. Beith) has also complained, as I did at business question time last Thursday. It is a House point, but it is a strong convention, which few Governments ever breach, that except in a real emergency which happens one day and requires legislation within the week. Opposition and Back Bench Members who wish to comment on a Bill should have a full week and two weekends between publication and Second Reading.
On this occasion, as I shall now show, there was no such emergency. When I complained at business question time I received such a gracious apology from the Leader of the House— one might almost call it a grovelling apology — that it is hardly fair to complain further. Nevertheless, the fact that the Government dithered for nearly three years and then rushed in a Bill against all the conventions is yet one more example of the procrastination and incompetence of their approach to the question of overseas student fees.
I fully accept that the problems of overseas student fees did not begin in 1979–80. They began long before that. Indeed, as it is now ancient: history, perhaps I can tell the story of how as Parliamentary Private Secretary to the late Mr. Crosland I was given an inspired written question to put down two days before Christmas eve 1966 [HoN. MEMBERS: "Shocking!"]. That never happens now, of course. That ensured that the argument took place in 1967. My hon. Friend the Member for Derby, North (Mr. Whitehead) is right. There was indeed an argument. Had I not been bound by the Trappist vows of a Parliamentary Private Secretary I might have said something quite different. Certainly there was argument. Labour Members voted against their own Government and a number of Conservative Members refused to vote with their party because they felt that it was hypocritical to oppose a measure that they knew perfectly well a Conservative Government would have introduced equally rapidly. A comparatively small differential was created at that time, the pressure coming from the Treasury rather than from the Department of Education and Science, and I now regret that it happened.
I also agree that the present Government were not the first to rely on the ludicrous legal judgment of Stransky — Stransky. It was first relied upon by the right hon. Member for Crosby (Mrs. Williams) when she was Secretary of State— no doubt on the advice of the legal luminaries who advise the Department of Education and Science and whose track record has not been the best of the various Departments over the years. One recalls the Enfield grammar school case, in which Patrick Gordon Walker was not particularly well advised as to what he should do. There was then the Tameside case which produced a House of Lords judgment and now the Stransky— Stransky case has been litigated as far as the Seaman


judgment in the House of Lords. For some extraordinary reason which I do not understand, the Department of Education and Science seems to be somewhat accident prone in legal matters.

The Secretary of State for Education and Science (Sir Keith Joseph): The hon. Gentleman is perfectly entitled to criticise Ministers to his heart's content. It is Ministers who take decisions. They receive advice, but they must decide what advice to accept.

Mr. Price: I shall stick to the conventions. The problem that has run throughout this issue has been the attempt to use a definition— "ordinary residence"— for a purpose for which it was never intended. The paradox is that, in tax law, the Inland Revenue has tried for the past 50 years to make the largest possible number of people that it can lay its hands on ordinarily resident in Britain to maximise the tax intake. Suddenly, the Department of Education and Science tries to make as few people as possible ordinarily resident, also so that the Exchequer can benefit.
The use of the concept of ordinary residence for those completely opposite purposes was bound at some time to come up against its present problem. I am pleased that we had someone of the legal status of Lord Scarman to reverse the weasel judgments in the lower courts under which both Lord Denning and the lower courts were willing to go along with the Karminski judgment of the "real home". They were going along with the administrative convenience of the Government rather than with the real meaning of the words in the English language.
I am glad that Lord Scarman said that one could be ordinarily resident because one likes the flowers and that the reason for one's being ordinarily resident has nothing to do with the stamp on one's passport. At last we have got some clarity in the issue.
I am about to criticise Ministers, but not the present Secretary of State just yet. I am amazed at the mistake which the right hon. and learned Member for Runcorn (Mr. Carlisle) made. He has a great deal of legal experience but, by relying on the Karminski judgment in 1980 to go over to full cost fees, he made a sea change. There can be no doubt that that was a ministerial mistake.
The hon. Member for Gravesend (Mr. Brinton) quoted from the Select Committee report. I shall mention a civil servant, partly because he is retired. He is called Mr. Alan Thompson. Most civil servants in the Department of Education and Science seem to be called Thompson these days. He gave evidence to the Select Committee. When asked whether he thought institutions needed any further guidance about the meaning of "ordinary residence", he said:
I do not think so. This is a matter which has to be settled ultimately through the courts and that administrative advice is not in point.
Time and again we have told Ministers, both in the Select Committee report and elsewhere, that saying that something must be settled in the courts necessarily means that there will be a two or three-year delay in the ordinary course of events. It is impossible to get away from that, as it is the extent of legal delay. By using the courts instead of legislation to solve this problem, for three years overseas students simply did not know where they stood. It is all very well for the Minister to say that those students

came here expecting to pay overseas student fees. They came here without a clue about what was happening because the Government could not make up their mind and said that the courts should settle the matter. They did not know how much they had to pay until Lord Scarman settled it. Many of them visited my surgeries, and I told them to wait for a decision from the Lords, who are much more intelligent than the Appeal Court judges, and that is was most unfair.
Perhaps I may give an explanation of the delay from 1980 until 1982. The Government have been willing to legislate on many other matters, and it is most uncharacteristic for Governments to say that the courts should settle a matter. I believe that the reason was the British Nationality Act 1981. The increase in overseas student fees was strongly connected with that repressive Act. The Government wished to pass the immigrant legislation, with its rule about living here for 10 years, which was directly aimed at excluding from British citizenship children born here to overseas students. The Government wished to get the Act through the House before they legislated on this matter. The result was that thousands — no one has managed to work out the number— of overseas students who had come here with great difficulty and who genuinely wished to study at our institutions, did not know where they stood. On that point the Government are guilty of unreasonable procrastination and, ultimately, incompetence.
There was then a second, extraordinary, delay. The Government must have known that the Scarman judgment would take the line that it did. The Law Lords could have done only two things— they could have stuck by the Karminski judgment on the real home, or they could have made a much more generous judgment, as Lord Scarman did. Why did the Government wait from December until 30 March before introducing this Bill? I have no explanation for that, except for the one offered by my hon. Friend the Member for Derby, North— that a furious argument was continuing about whether to include some straight retrospective legislation. Instead, the Government decided to include some fuzzy retrospective legislation. The opening paragraphs of the Minister's speech tonight did not convince me that there was no element of retrospective legislation in the Bill. I do not necessarily complain about that, because I defended retrospective legislation from time to time when the Labour party was in power. I am not a complete purist who says that legislation must never be retrospective.

Mr. Bob Cryer: In the Clay Cross councillors case, Conservative Members were the purists who said that there must never be retrospective legislation. They called it the slippery slope towards Fascism. There has been a curious change of attitude now that they are in government.

Mr. Price: That is an excellent point. All political parties have such curious changes of attitude once they are in government. I shall need a great deal of convincing in Committee that this is not a retrospective measure but rather, as the Minister put it, a gloss on preceding legislation.

Mr. Beith: Does the hon. Gentleman have the same difficulty that I have experienced in squaring what the Government say about fees and awards with the background of the Bill? It was stated in the circular that


was sent to local authorities that the Government accepted that it would not be right to seek to deprive students already on courses, and others who had completed their courses, of the benefits which the judgment has shown they have always been entitled to receive.

Mr. Price: We have had an ex cathedra statement from the Under-Secretary of State that fees and awards are utterly different. That statement will be probed in Committee to ascertain how utterly different they are.
Overseas students add things up and try to ascertain whether they can afford to remain here as students. If they cannot afford to do so, they return home. It will come as a great surprise to many overseas students when they are told that in principle fees and awards are different.
The Scarman judgment came as a great relief to many students who were thinking that they could afford to stay on no longer because of the high level of fees that they were being charged and the lack of maintenance awards. They had three months of phoney peace, as it were, while the Government hesitated. They are now being told that they can have their awards but will be deprived of the right to a home student fee which Lord Scarman appeared to give them. This is another issue that will have to be probed in Committee. Having had some experience of these matters, it is not nearly so self-evident to me as it is to the Minister that fees and awards are so different.

Mr. Hooley: They are different in one respect because whereas a fee is intractable once set, an overseas student can, in effect, modify the cost of living for himself.

Mr. Price: Had that assertion been put the other way round, I should have seen some logic in it. However, we have the Minister's gloss, and that will be subject to scrutiny.
The Government are in chaos, but not only because of incompetence and procrastination. The chaos stems from the disastrous and unnecessary concession that the Prime Minister, as I understand it, gave to EC students. It appears that there was a straight swap with the Germans so that we could get German support for our stand on the EC budget after the Dublin summit. That story has often been printed and it has never been denied. I shall continue to believe it until it is categorically denied.
When the concession was made to the Europeans, it was never thought that it would produce too many anomalies. It led to the specious argument that there would be roughly a straight swap with EC students coming to the United Kingdom and United Kingdom students going to the EC. It was said that we should do a deal on that basis. There was no justification for so doing and the United Kingdom was not compelled to make the deal under any EC regulation. It seems that we entered into the deal to please some of our friends in Europe as part of a package deal. I am not wholly against that approach, but it has had some fascinating consequences from which it will be difficult to escape.
Within the EC is France, which has an attitude to Third world countries that are connected with it that is quite different from the one that we adopt. As a result, we have given an amazing array of French dependent territories a concession that I am sure we never intended to make. By making the concession, we gave another £ 1.5 million to quite wealthy European students, when everyone agrees that it would have been far better to have made that sum available to more deserving students from the Third world.
If the number of EC students admitted to British universities and colleges in the previous September is monitored, the extraordinary result arises that the universities and colleges do not want EC students any more because they do not drag a big hefty overseas student fee with them. The universities and colleges are more prepared to take students from Canada, the United States, or anywhere else for that matter. They are prepared to accept students not because they are appropriate for the course or because they have the appropriate qualifications in competition with British students but simply because the students, by attending that university, drag a whopping £ 3,000, £ 5,000 or £ 7,000 fee behind them. That distorts not just the academic but the moral nature of the institution.

Mr. Whitehead: Those distortions are far worse and more sinister for home students than the alleged distortions of subsidy stated by the hon. Member for Gravesend (Mr. Brinton).

Mr. Price: I thoroughly agree. The hon. Member for Wokingham (Sir W. van Straubenzee) said that our constituents, bearing in mind the election, might not be especially interested in overseas student fees. My constituents, who cannot get their children into university because the University Grants Committee, under orders from the Government, has put an absolute limit on the numbers of students in certain universities, are not at all pleased. They know that those universities can take as many overseas students, on top of their home quota as they want. My constituents are interested but not very pleased about that state of affairs.
The Labour Government's effort to solve the problem by quotas instead of money did not work properly because it was not planned sufficiently carefully by the right hon. Member for Crosby (Mrs. Williams).

Mr. Cryer: Some civil servants probably sabotaged it.

Mr. Price: In principle, quotas are the right way to deal with the problem rather than to allow the power of the overseas purse to fix the number of overseas students attending institutions. Little by little, home students will be pushed out, although they should have a prior right to attend educational institutions.

Mr. Waldegrave: There is no question of overseas full-fee-paying students pushing out home students, as the hon. Gentleman well knows. Quite outside the UGC quota, some universities have a net income from their overseas students that helps with the overheads and strengthens the institutions for home students.

Mr. Price: I appreciate that that is the Government's line. If I were standing at the Dispatch Box that is the line I would be purveying. If the Under-Secretary had listened carefully to some of the speeches by Professor Ralph Dahrendorf on this issue and knew the deep cynicism with which he went to the United States to whip up students for his one-year diploma course, while accepting that they were not up to the standard of other home students at the Lodon School of Economics, I do not think he would take that line. The overseas students must have desks, and classrooms to sit in. Although in brute financial terms they might strengthen institutions, the truth is that if this state of affairs continues at the present level the effect will be to squeeze out home students.

Mr. Kinnock: Is it not a logical and widely understood extension of the Minister's case that by discouraging overseas students from coming to British institutions, the Government are weakening the institutions for home students? Has not that been one of our main arguments against the full cost fee system?

Mr. Price: I certainly agree. The objection to the present system is that it distorts the institutions and courses. In addition, it prevents universities and other bodies from sticking to academic criteria and they find themselves distorted by other criteria. The Government now seem to have adopted a policy of allowing EC students and students from Hong Kong to pay home student fees. Perhaps students from Cyprus will win home student fees one day, I do not know. There seems to be a policy of selecting countries because of trade, or because they are in danger of becoming Communist. As a sort of reward, their students are given home student status. So far that status has been extended only to the Falkland Islands and Hong Kong but, once the thin end of the wedge is in, it can be shoved in further and further, and other countries will then qualify for the privilege. I hope that the Government will think carefully about the problem, because it represents one more distortion in the system.
The Minister frequently mentioned students who came to Britain thinking that they had to pay full-cost fees. He constantly referred to overseas students. One of my constituents, Anthony Nnonelyu, is a first year student of architecture at a London polytechnic. His case is in the grey area. He has been in Britain since the age of 10 and has been to a London comprehensive without paying any fees. However, for the past 10 years the Home Office has argued with me about the status of his mother, who happens now to be the head of a single-parent family. She says that she is a student, but the Home Office says that she is not a student any more. It is about to throw his mother, and the rest of his little brothers and sisters, out of Britain and to send them back to Nigeria after many years here.

Mr. Cryer: That shows Tory concern for the family.

Mr. Price: It is a scandal. However, the Home Office has graciously said that as Anthony has reached the age of 18, he might be allowed overseas student status — although he has been a home student for 10 years— because his mother has no right to stay here any more. Is someone in that position a home or overseas student? This week, I have been arguing with the Home Office, because Anthony was asked to go on a field trip to France next week. Today, the Home Office told me that as his status was not settled, it could not give any guarantee that he would be allowed to return to Britain if he went to France with the rest of his class.

Mr. Cryer: Scandalous.

Mr. Price: I checked with Lunar house in Croydon to make sure that it was not just the Minister's private office that said that. However I was told that he should not go on any field trips until his status had been settled. I tell that little story only because it gives the lie to the bland assertion that there are overseas and home students. In London, hundreds and hundreds of students still do not know— even with the Bill— whether they are home or overseas students. If someone like Anthony comes to Britain, and his mother's status is in question, is it deemed

that he has come to Britain solely for educational purposes or that he has come to be with his family? There are hundreds of similar issues that need to be sorted out. However, they will not be resolved if the Government adopt the simplistic view that students fall into one category or the other.
Thousands of students about whom we are talking— I am sorry to have to remind the Minister of this— are real people, with real worries. These are not just financial worries. They are worries that extend to the fact that if they suddenly lose their student status because they cannot afford to keep up the overseas fee, they are then subject to visits from the police because they are no longer students and no longer legally here, and they are in danger of being thrown out of the country. Often, male students have dependent families and are worried about their wives and children.
At the end of his speech, the Minister spoke of using the convenient shorthand phrase "overseas students". That is not convenient shorthand but a hopelessly inconvenient phrase. The Minister said that the Bill had to be brought in in a hurry to clear up a problem. I got the impression from his speech that the Bill as it stands, even with the regulations that we must see in Committee go into it, clears up nothing. If the Minister wants to push through the Committee stage quickly so that we can get our general election over and come back in a new Parliament with the Bill passed into law, he will have to do very much better in Committee in addressing the students' predicament than he has in the Second Reading debate.

Mr. John Watson: The hon. Member for Derby, North (Mr. Whitehead) referred to this as being a "Barebone's Parliament." On the odd occasions that I am successful in catching your eye, Mr. Deputy Speaker, that is normally the case. Some hon. Members have a reputation that is such that when their name appears on the monitor, they have the ability to empty the Tea Room of enthusiasts who wish to hear the pearls that they have to offer. Normally when I rise, I seem to have the opposite effect and people develop a sudden interest in what the Tea Room lady has to say. I see that my hon. Friend the Member for Lincoln (Mr. Carlisle) is setting a good example. I understand that the tea is good this evening.
When I was first elected I was advised that one should never rise to make a speech unless one possessed considerable powers of intellectual analysis or considerable originality of thought, or could crack a few jokes. I have tried to follow that dictum over the past four years, which has caused some people to wonder why it is I get to my feet at all. Whenever I try to pretend to intellectual ability or originality of thought, it seems to strike some colleagues as a tolerably good joke, and I can get away with the odd speech once a month.
That is not the reason why I am speaking tonight. I am speaking tonight because I think that this is a predominantly good Bill that has been unfairly criticised. My other reason is the old parliamentary dictum that if one asks a nasty question on Tuesday, one gets wheeled in to make a nice speech on Wednesday.
Some unfair allegations have been made against the Bill. The first is that it is retrospective. I cannot see how that can be said, in all fairness. There is no mention that awards already paid should be clawed back and no serious mention that fees charged in the past should be reinvoiced


and charged to the greater sum. To describe this legislation as retrospective it is necessary to say that fees charged in the future may be higher and awards paid in the future may be lower than some people have half expected them to be between December 1982 and April 1983. Only by that extremely narrow and rather artificial definition can the Bill be presented as retrospective.
By that definition, how does one judge the Greater London council rates, which have this month gone up substantially, in spite of the fact that the fearless leader of the Greater London council said in December last year that he hoped that the rise would be kept to a minimum? They are on all fours.
I have heard it suggested that the regulations that follow the Bill should be retrospective, and that is why the Minister was right to say that we must avoid any element of retrospection. There is a simple and clear reason for that. Why do overseas students come here in the first place? Partly, I submit, to benefit from our education establishments, but partly also because they perceive Britain to be a free country which can set a civilised example to the rest of the world. That freedom is based in no small part upon the concept that we call the separation of powers— the idea that it is the job of the judiciary to interpret the will of Parliament and that Parliament will respect that interpretation. The moment that Parliament tells the judiciary that it does not like that decision and not only shall we change the law but we shall change the law back to square one so that the ruling will come as an irrelevance is the moment when retrospective legislation begins, albeit slightly, to erode the standards of civilisation that cause some overseas students to come here in the first place.
The second criticism, which has not been clear so much as implied throughout the debate, is that perhaps it might be wrong in principle to introduce this legislation. Speaking on behalf of the Liberal party, the hon. Member for Berwick-upon-Tweed (Mr. Beith) said that he appreciated the need for legislation and that he could support it, at least in principle. That was not quite so clear from the speech of the hon. Member for Derby, North. I hope that when he replies to the debate he will answer this simple question. Suppose that, following the Scarman judgment last December, the Government had done nothing. Suppose that the Government had said, "Oh dear, that is a pity. We did not expect that judgment but it has come and we shall have to live with it. We shall not propose any legislation as a result." Would a Bill of this kind have formed part of the next Labour party manifesto? If the hon. Gentleman answered that question in his opening speech, I cannot have been listening sufficiently closely because I confess that it eluded me.

Mr. Whitehead: The hon. Gentleman asks a rhetorical question. I can put him out of his agony now. If he reads the Official Report he will see that I accepted, given the situation in which the Government now find themselves and the comparative urgency following the Scarman judgment, that the Bill is necessary. But I would not, as the Irishman said when asked for directions, ever have got to this place in the first instance.

Mr. Watson: I am grateful to the hon. Gentleman for that clarification. My question was not rhetorical. I wanted an answer and I am grateful to him for giving me one.
I shall take this opportunity to raise a constituency problem. I ask no forgiveness for doing that because it is

a problem of general rather than specific concern. A constituent of mine, who lives in Skipton, works for the Overseas Development Administration. Between 1967 and 1980 he was based in Uganda. Between 1980 and 1982 he was based in Kenya. In the middle of last year his son gained admission to Cambridge university. At that time, the family had had their home in Skipton for some years. The son gained admission to Cambridge university but in June last year he was not resident in Skipton. Therefore, when his eligibility for an award came to be judged, it was not the education authority of north Yorkshire that had to make the decision because the money came from some Government fund, nor was it the Department of Education and Science; the decision was made by Cambridge shire county council. It decided that because my constituent's father had been working in Uganda between 1967 and 1980 his job with the ODA was not temporary but permanent. Therefore, he found himself disqualified under the three-year rule and initially my constituent's son did not receive an award. Subsequently, Cambridgeshire county council changed its mind— I can only put it that way— and the problem seemed to go away.
There were several elements of that case which left me with a deep uncertainty about the manner in which the system works at the moment. First, the decision on the award was taken, not by north Yorkshire county council where my constituent lives, or by the Government who ultimately have to pay the money, but by Cambridgeshire county council, because that is where the university is based. Secondly, elected Cambridgeshire councillors had to sit in judgment and decide whether my constituent from 200 miles away was working permanently or temporarily when he was in Uganda. Thirdly, on the basis of somewhat slender evidence, they decided that he was based there permanently and was therefore excluded on the basis of the three-year rule.
Fourthly, faced with almost identical facts other county councillors and education authorities in other parts of Britain have come to dramatically different conclusions. Fifthly, the means used to communicate the decision to my constituent was so inefficient and inadequate that his son had already started university and personally paid the fees before he received the bad news that he was not entitled to an award.
There must be scope for clarifying the guidance to local authorities in such cases, which I am sure are general rather than specific and typical rather than isolated. We are looking forward to the Minister's response with eager anticipation and I hope that he can clarify the position.

Mr. Frank Hooley: The Government are reaping the fruits of their folly in introducing full cost overseas student fees. At one time, one of the glories of the academic world was that it regarded itself as international and did not take much account of national frontiers. At one time a student could go to Oxford, Paris, Bologna or Prague universities and be part of the fraternity. He did not have to take account of whether he was German, Czech or English. The move towards discrimination between overseas students and home students which, as the hon. Member for Wokingham (Sir W. van Straubenzee) said, was a disastrous innovation by a former Government, is creating more and more complications and will continue to do so.
The full folly is the sheer idiocy of so-called full cost fees and trying to treat education as if it were a commodity in the market place like margarine rather than something with a special social and cultural value which must be preserved.
The Government have committed the same folly over home students. They thought that they could chance their arm and push up fees from £ 400 to £ 900, but their decision kicked back at them. The Government discovered that they were making a serious mistake and had to cut fees from £ 900 to £ 480.
If Governments treat students in that way, the kickback will come from all directions. I suspect that this is only the beginning of a long line of emergency Bills, patching, mending and cobbling because of the idiocy of the original policy.
It is extraordinary to note that instead of the United Kingdom being proud that our universities, polytechnics and colleges are so highly regarded, so famous and have such a magnificent reputation around the world— which indeed they have — we should want to introduce hindrances, obstacles and difficulties for students from all over the world who want to take advantage of our great education facilities. Other countries do not do that. Britain is unique in going for the concept of full cost fees. I know of no other country that has indulged in this idiotic and counter-productive policy. It is landing us in more and more difficulties internally, and they will continue.
Most overseas students would have been prepared to make do and mend, to get along and to pay their way with fees of £ 200, £ 300 or £ 400, but when the Government imposed fees of £ 2,000 or £ 3,000 the stakes became enormously high and, as a consequence, the litigation arose. The litigation has not gone the way that the Government expected and they do not like it. The Government's behaviour towards overseas students has been arrogant, high-handed, xenophobic and grossly discriminatory.
I use the word "discriminatory" deliberately, because the Government have given rich students from some of the richest countries in the world — Germany, Holland, France, Italy and Belgium— the opportunity to study here for the same fees as home students, while the poorest students in the world, from villages in Tanzania, Malawi, Bangladesh and Ghana, are being screwed for every penny and every shilling that can be taken from their pockets in a ruthless, savage and unscrupulous manner as a consequence, they are staying away. The Government have carried out this policy without consultation with the organisations that could have advised them better. Almost every organisation concerned with Commonwealth and overseas students has complained bitterly about the lack of serious consultation by the Government on the complex of issues that arises from this massive jump in oveseas students fees.
Since the Government came to office overseas students have been kicked around from pillar to post. Fees and charges have risen enormously. The Government have sought to impose health charges. The consequence is that the overseas student world is becoming disillusioned with education in Britain. The figures are startling. Obviously the Europeans, against whom there is no discrimination, are not worried and still come. I am told that the overseas student intake at the university of Sheffield is down to one

fifth of its former level. About 80 per cent. of the overseas students who a few years ago might reasonably have been expected to come to the highly distinguished university which I had the pleasure to serve for 14 years before coming to the House, no longer come. The figures will fall. As the intake goes down, the multiplier effect goes into reverse.
The figures nationally are nearly as disastrous. It is estimated that, in 1978, 700 undergraduate students came to this country from the poorest countries. By December 1981, the number had fallen to 474. On public sector non-advanced courses— I am discussing countries whose per capita income is about £ 200, or $ 300, a year— the number of students in 1978 was 1,568. By 1981 the number had slumped to 607— cut to about a third. The 1981 figures are not the end of the story and I expect that the 1982 figures are as low or lower. On public sector advanced courses, there were 2,200 students in 1978. In 1981 the figure had slumped to 1,300— about a 40 per cent. fall. That is the trend from the poorest countries in the world.
A similar trend occurs in countries which, though poor, are better off than the others I have mentioned. There, the number of university undergraduates has declined from 8,664 to about 7,000. In the public non-advanced sector — largely the further education colleges— the figure has slumped from more than 10,000 to under 4,000, yet it is in that sector that much valuable training for developing countries can be given. The developing countries do not necessarily want postgraduate students in philosophy. Rather, they want students who are trained in the engineering, electronics and similar practical and vocational courses which are given par excellence by the further education colleges.
Although the slump has not been so sharp in public sector advanced courses, the figure has fallen from nearly 11,000 to 8,300. That is the impact of the Government's policy on the number of overseas students, and the damage to our standing and reputation has been enormous.
The hon. Member for Wokingham suggested that not much damage had been done, that countries such as Malaysia were still sending many students here and that there was nothing to worry about. But it was Malaysia that kicked back and started to worry the Government. It was when Malaysia kicked the Tory Government where they are sensitive— in their business pocket— that they began to wake up to the folly of the policy on which they had embarked. When Malaysia began to take over British business interests and told British business men that it would not trade with them if its students were treated in this fashion, the Foreign Office suddenly began to take on board the idiocy of what the Secretary of State for Education and Science and his colleagues were doing. As a result, after some anguish and puzzling about what to do, the Foreign Secretary came forward with his scheme to get extra money from the Treasury.

Sir William van Straubenzee: I simply made the point— I think that the hon. Gentleman will find that I am right— that the number of students enrolled from Malaysia at the University of Wales Institute of Science and Technology increased throughout the period.

Mr. Hooley: The number of students may have increased at one institution — I cannot dispute that without looking at the figures— but the fact remains that


it was the sharp reaction of Malaysia among others that induced the Foreign Office suddenly to look at this problem with new urgency and to decide that something had to be done. If the hon. Gentleman's argument is correct, he must explain why Malaysia was one of the three countries singled out for special treatment with the £25 million political patronage money that the Foreign Office had at its disposal for overseas students.
The modification of policy that the Foreign Office has rushed in to repair the damamge done by the Department of Education and Science will not bring back the students who have gone for good to the United States, Canada and other English-speaking and non-English-speaking countries. The trend is now established. These countries are fed up with the shenanigans of the Department of Education and Science. I do not suppose that legislation of this sort will satisfy them. As my hon. Friend the Member for Lewisham, West (Mr. Price) has said, all the grey areas, ambiguities and uncertainties about this legislation will cause more dismay, alarm and concern to overseas students rather than reassure them.
I shall try to explain what the Bill will seek to do when we see what the regulations are. The Minister will correct me if I have it wrong, which would not surprise me in view of the sketchy outline of the Bill we have had and the fact that we do not have the regulations. My impression is that a student who has put in three years' ordinary residence by the Scarman definition before 1 September 1982—

10 pm

Ordered,
That, at this day's sitting, the Education (Fees and Awards) Bill may be proceeded with, though opposed, until any hour. — [Mr. Major.]

Question again proposed.

Mr. Hooley: A student who has put in three years' ordinary residence according to the Scarman definition before 1 September 1982 must be given a mandatory award for 1982–83 if he is otherwise qualified. That is, if he has the three years and is otherwise qualified, he must have the award for 1982–83. I am not sure whether the award will be for the length of his course or just for one year. That is a feature that could land us in further litigation because if the Government say, "Under the Scarman judgment he can have it for one year but not subsequently", all sorts of litigation will arise as to whether what is called a mandatory award is for a course or for a bit of a course, and we shall find ourselves with many more jolly bits of legislation to consider late at night.

Mr. Waldegrave: I can put the hon. Gentleman out of his agony on that straight away. I have said twice that mandatory awards are given by statute for the whole of the course.

Mr. Hooley: That is a help. As I understand it, if the student has had his ordinary residence as per Scarman for three years before 1 September 1982, he must be given a mandatory award for 1982–83 and the remainder of his course if he is otherwise qualified, in accordance with the other regulations. Similarly, a student who has put in three years' ordinary residence according to the Scarman judgment before 1 September 1981 must be given a mandatory award for 1981–82 and the rest of his course. Likewise, a student who has put in three years' ordinary residence as per Scarman before 1 September 1980 must be given a mandatory award for 1980–81 and the remainder

of his course. I believe there is a limitation going back to 1979. While I am not certain of that. I assume there is some limitation.
I assume also— again, this was not clear from what the Minister said— that a student who has put in three years' ordinary residence before 31 March 1983, when the new regulation came out, would qualify for a mandatory award for 1983–84 and subsequently, unless that is to be regarded as cancelled out by this measure. I am not clear of that and it would be useful to have some clarification.

Mr. Cryer: Would my hon. Friend agree that a difficulty under which the House is labouring is that we are dealing with a Bill which is of a sketchy nature which gives virtually unfettered powers to the Secretary of State to produce regulations? Would he further agree that the regulations should be part of the primary legislation, or at least should be produced for the Committee stage? 'The likelihood is that they will not be produced and it will be left to the Secretary of State's powers to produce them subsequently.

Mr. Hooley: That is a serious difficulty and it was rehearsed by my hon. Friend the Member for Derby, North (Mr. Whitehead). Without the regulations it is difficult to see where we are going. I should have thought that the Minister could at least have produced an outline along the lines I suggested, subject to the ultimate production of the detailed regulations. There may be problems with the regulations because I do not know how quickly the Minister thinks he can lay them. I believe that there must be a period of sitting days during which the House can consider them or vote to annul them. He will therefore come perilously close to the new Session unless he gels a move on, and, again, that will not enhance the reputation of this country in its dealings with overseas students.
We are plunging deeper into trouble because of our discriminatory fees policy, which no other country in the world practises. We should stop discrimination in fees between home and overseas students. We should restore to the great academic institutions of this country the freedom that they once enjoyed to exercise their own good sense and wisdom in balancing educational needs, and their responsibilities to our students, which they have never neglected — given the resources — against I he undoubted value of admitting overseas students from other countries, partly in response to the dire need of the poorest countries for that service and partly to sustain a long and distinguished international academic tradition, which was once a splendid feature of Europe and which has now been badly damaged by the Government's folly.

Mr. Kenneth Carlisle: I support the Bill because it backs two basic principles. The first is that any change in the law should be a considered change and meant by the Government rather than arising by chance. As we know, the ruling of the other place in December means that the law is no longer what was intended by Parliament because it allows many more overseas students to claim ordinary residence in the United Kingdom. Parliament never intended that. The scope of the law has been extended by interpretation. It is right in principle to put the situation back to what it was before the December judgment. I do not believe that the House can feel that that is unreasonable. Because of that principle alone, the Bill


deserves all-party support. In supporting the Bill we have to remember that under all Governments overseas students have been treated differently from home students.
The second basic principle that sustains the Bill is that Parliament should approve expenditure. We should understand that above all in the House; yet the very judgment of the other place could cost the taxpayer an extra £ 50 million. I understand that it could cost £ 20 million more in grants, and in addition we shall lose £ 30 million in lost fee income. Even today such a sum is not to be sniffed at, despite all the inflation of the past years. It is right that, if such an extra sum is to be spent, it should be done after a vote in the House rather than through judgments in the courts. Therefore, it can be argued that the Bill only reaffirms the House's control over expenditure. On that second count it is hard to fault the Bill.
However, the Bill is narrow. As many hon. Members have stated, we should take a generous approach to overseas students. Historically, we have welcomed them in this country, we have good links with the Commonwealth and, above all, as a trading nation, we need to forge future links that will give us our markets and provide us with a welcome in other countries. Overseas students help towards the quality and breadth of our universities. It is right, therefore, that we should seek to continue the traditional generous and outward-looking nature of our policy towards overseas students. We should pursue a policy of enlightened self-interest.
It is easy for the hon. Member for Sheffield, Heeley (Mr. Hooley) to say that we should not worry about the cost. The Government had a specific duty to make this country live within its means for the first time, so they had to hold back on Government expenditure in the difficult conditions after 1979. That was a central aim and duty of the Government. One can therefore understand the pressures for cuts in overseas aid which then existed.
No one can dispute that it was right to cut down the grants and aid that were being given to the wealthiest of overseas students. At the same time, however, we continued our aid to overseas students through our aid programme.

Mr. Whitehead: Will the hon. Gentleman give way?

Mr. Carlisle: I hope that the hon. Gentleman will forgive me if I do not give way, because time is getting on.
Now that Government expenditure is at last under control, we can have a more generous policy. For that reason, I welcome the Government's change of heart in February when an additional £ 20 million per year was given to provide scholarships for overseas students. The number catered for each year was thus increased substantially from about 9,000 to about 15,000. That is the correct way to increase expenditure. That was a specific judgment made by the Government and supported by the House. It was a careful decision and not one thrust upon the Government by the courts. For that reason, I support it.
I hope and believe that the Government will continue the trend towards a more generous policy for overseas students, but for the reasons of principle that I have stated I support the Bill.

Mr. Bob Cryer: The hon. Member for Lincoln (Mr. Carlisle) said that Government expenditure was under control. Does he think that the cost of the dole queue, largely created by the Government, will remain at £ 17 billion? If the Government's present economic policies are maintained, it will increase. The hon. Gentleman seems to have forgotten the massive expenditure represented by the dole queue.

Mr. Hooley: And Trident.

Mr. Cryer: The hon. Member for Lincoln said that the Bill was a reaffirmation of Parliament's original intention, but the Library research document gives a very different picture.
The Act of 1962, which started all this, was then interpreted not by Parliament but by DES administration memorandum 14/67. When local authorities began to change the DES interpretation, the DES in circular ACL 1/78 accepted the changed interpretation in practice. The then Secretary of State referred back not to some parliamentary view but to Stransky v. Stransky as an authority that should be accepted. In other words, the Secretary of State in an administrative memorandum referred to a court decision, so the notion that the Bill somehow re-establishes a parliamentary supremacy over the courts which prevailed prior to the House of Lords decision in December 1982 is simply not true.

Mr. Christopher Price: Ministers referred not just to Stransky v. Stransky but to MacRae v. MacRae 1949 and to the Australian case of Clarke v. The Insurance Office of Australia Limited 1965. On such a tenuous basis do the Government make our law.

Mr. Cryer: Indeed, they referred not even to a string of statutory instruments but to a string of court decisions.

Mr. Christopher Price: In Australia.

Mr. Cryer: Yes. I reaffirm my strong reservations about the notion of differential fees. As my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) said, they diminish the status of academic enterprise and create difficulties, which I shall describe when I have heard what the Under-Secretary of State has to say.

Mr. Waldegrave: I did not want to interrupt the double act of the hon. Members for Keighley (Mr. Cryer) and for Lewisham, West (Mr. Price). As a result of the speed of that double act, the House may not have realised that the atrocities to which the hon. Member for Keighley referred were those conducted by the Government of which I believe he was a member for a while. My hon. Friend the Member for Lincoln (Mr. Carlisle) is right to say that this measure introduces more parliamentary control than would result by leaving the matter to the administrative procedures that were followed before.

Mr. Cryer: I am not one of those people who believe that because something happened between 1974 and 1979 it is true for all time. Indeed, I was a member of the Labour Government for two years, but that does not mean that everything that that Government did should be absolved from criticism. I happen to believe that it was a damned sight better Government than this one and I also recall that unemployment in Keighley then was 4· 5 per cent. whereas it has increased to more than 14 per cent. under the Tories. Moreover, during the 1979 general election campaign, the


Tory candidate tried to claim that unemployment had reached the astronomical height of 7 per cent. under Labour. Of course there are things about which the Labour Government can be criticised—this is one—but that does not mean that there were not a host of other issues on which the Government acted correctly. The British people benefited far more from that Government than from the economic whirlwind that this Government have introduced.
The Government say that part of their reason for introducing this legislation is the need to save a bit of money because of difficulties with public expenditure. They do not apply that criterion to farmers who get almost £2 billion a year in subsidy. There is not a peep out of any Tory Member about that, certainly not out of members of the Tory Cabinet, many of whom coincidentally have farms.
I shall now return to the narrow issue which we are considering. The Minister diverted me. The full-cost fees policy is against our interests. I do not say that on the philosophical ground that we should benefit humanity, but on the narrow view of the possible advantage to commerce and industry. If people are encouraged to come to Britain for education, it is likely that they will look to Britain more readily when placing commercial orders in the future.
As the Minister kindly referred to my membership of the Labour Government for two years, perhaps I should mention that I met a head of a power supply operation in a former Commonwealth country who had been educated and trained in Britain. He had been on a sandwich apprentice course with GEC. It struck me that he had a predilection to buy from Britain as he had been trained here and was familiar with the technology that we produce. That is right.
Quite apart from that narrow commercial advantage, there must also be a philosophical sympathy. No doubt during the next general election campaign the Government will talk about the influence of the Soviet Union being under beds in Britain. They will defend American foreign policy which contains Communist expansion hither and thither, yet, by their policies, the Government are pushing students from other countries into the arms of the Soviet Union and its supporters, which provide educational facilities. Perhaps those countries' philosophies dictate that they should encourage students to be trained there or perhaps they want to have a political advantage and influence. Whatever the reason, the poorest nations are more likely to send students to Communist countries, despite the recent additional expenditure through the Foreign and Commonwealth Office to provide another 5,000 to 6,000 places in our education system.
Many of the poorer nations have had difficulties. Recently Zimbabwe, which is very poor, had to bring home some of its students in the United Kingdom because it could not afford to keep them here, although the Government claim that they gave that country sufficient money to enable those students who had already embarked on courses to remain here. That claim is not borne out in practice,.
The Bill is a churlish measure, and although the cost has been estimated at between £30 million and £46 million, that pales into insignificance beside the £2 billion subsidy to farmers and the £10 billion that Trident will cost. The annual cost of even partial support for overseas students so that the full-cost fees are reduced to a more reasonable level could be met with some change out of the

cost of stationing cruise missiles in the United Kingdom — although the Government continually claim that we are getting them at a rock bottom price.
I do not like legislation that gives the Secretary of State power to introduce regulations by the negative procedure. There are some fetters on his power, and the Minister will no doubt confirm that the Bill cannot be interpreted as retrospective legislation and that all the statutory instruments produced under the legislation will have no retrospective element. The. Bill uses phrases such as
This section applies to any award".
Statutory instruments will not apply to awards already in existence, but only to awards that would have been made but for the legislation authorising the statutory instrument. It is not good for the Chamber to give unfettered powers to a Minister to make regulations. If the regulations are in hand, there is no reason why they should not be included in the primary legislation, with power to amend. However, the regulations are not before us. The primary legislation is simple and gives wide enabling powers to the Secretary of State. We should be cautious about that procedure.
The Bill must be considered and agreed to, but the statutory instruments that the Minister will produce need not be considered. They are subject to the negative procedure, and we all know how difficult it is in practice to debate a prayer. A prayer will be debated on another relevant instrument in Committee, but it has taken years for the Government to accept that if a statutory instrument is defeated in Committee it must be debated on the Floor of the House. Even that is not hard-and-fast constitutional practice, although it should be. For a prayer to be debated in the House, it must always be signed by a Member of the Opposition Front Bench. If it is not, the Government will not consider it. That is wrong. I should have thought that if six people signed a prayer the Government should allocate time to it.
In 1951, when there was a Labour Government with a small majority, Conservative Members suddenly became interested in praying against instruments because they were open-ended. Members could talk for as long as they wished to stop other Government business, but, following that abuse of the House, prayers were limited to one and a half hours. That seems to be reasonable if Members have the right to lay a prayer and to command some debating time. Unfortunately, Members do not have that right, and when a contentious issue arises—the Bill seeks to deal with a highly contentious and difficult matter, and I am sure that everyone admits that it is the product of a tortuous process—an affirmative instrument should be brought before the House so that there can be a debate and a vote.
The negative procedure is not appropriate in this instance, because the powers that we are being asked to give the Secretary of State are, in my opinion, far too wide and lack the necessary qualifications in the primary legislation. I did not want the Bill to be given a Second Reading without some criticism being placed on record of the wide powers that it contains for the Secretary of State in addition to the criticisms expressed by my hon. Friend the Member for Derby, North (Mr. Whitehead).

Mr. Harry Greenway: At times I wondered where the hon. Member for Keighley (Mr. Cryer) was taking us, especially when he complained almost constantly about farmers receiving a £2 billion subsidy. Does the hon. Gentleman object to food prices


having risen by less than 1 per cent. in the past year? Does he object to cheap food for the housewife? He talked about the cost of Trident and he seems not to remember that the Labour party's proposed programme would cost £30 billion to £40 billion a year. If that programme were implemented, it would mean an extra 12p on the standard rate of income tax and would lead to 5 million being unemployed. The hon. Gentleman always throws these figures about wildly, and I advise him to think a little more steadily about the other side of the coin. It would be a healthier approach if he balanced his remarks more carefully.
I have listened with respect to what has been a good debate. I have been concerned about the examples of individual overseas students who have experienced hardship. Instances of hardship among overseas students have arisen in my constituency, but I wish to consider the need for the Bill through the eyes of those who live, as it were, next door to such cases and who are home students, indigenous people who are unable to get discretionary awards and who hear the strident arguments that are always advanced on behalf of overseas students.
I feel keenly that overseas students should be accommodated in this country as far as is possible, but when I canvass the views of home students I find that they are keen on the Bill for three reasons. First, the Bill will close a loophole which, if left open, would change the intake of universities and Government policy by default, which would surely be wrong. Secondly, by closure of the loophole the Bill will prevent an enormous extra and unplanned financial burden from taking place on the British taxpayer; and it is reasonable to consider that. Thirdly, the Bill will prevent undue discrimination against some students.
The loophole that the Bill will close was opened by the test case in the House of Lords on the definition of "ordinary residence". With the new definition of the term, only those resident here for three years will be entitled to be treated as home students. Many of the students to whom I have spoken in my constituency have argued that any number of wealthy foreigners could abuse the system and achieve a university education on the cheap for their children by sending them to boarding school or college here for three years prior to their university application. This has happened a good deal and it has been mentioned in the debate. However, it is worth mentioning it again. There is a need for the Bill on the ground of abuse of the system alone.
The financial implications for the British taxpayer are horrendous. It has been estimated that the cost in grants will be about £20 million per annum and that over £30 million per annum is lost in fee income. This is because foreign students under both complexions of Government have been charged a higher fee than home students. A home student's undergraduate fee is £480 and a foreign student may pay anything from £2,500 to over £7,000. The financial loss and consequent burden on the British taxpayer would not stop at that point without the Bill. Many foreign students might have become eligible for a grant when they would normally never have expected to receive one. Such grants could only be discretionary and would necessarily be limited in number. Presumably, the entitlement of overseas students would deplete the pool of places for British candidates.
The obvious unfairness resulting to home students would be hard to square with the young in my constituency, who are striving hard to gain university places. In saying that, I am arguing not against help for overseas students but against an indiscriminate subsidy for all overseas students, regardless of their families' means. On humanitarian grounds, it is important that students who are refugees, who are given political asylum or who are from EC countries are liable only for the home rate of tuition fee.
I welcome the £3 million annual subsidy that is available under the overseas research students award scheme for 1,500 scholarships. Those students must be of high academic merit.
I have argued long and hard for an increase in Britain's aid programme to the Third world. Aid in the form of university education in Britain is at its most profitable in the long term, not only because some of the best students return home to put their utmost into developing their countries but because, as the greatest democracy in the world, Britain may have legitimate hopes that the traditions of our democracy may be exported as well.
The extra £46 million that was announced in February by my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs as being available during the next three years to foreign students showed that the Government were not guilty of massacring the funding for needy overseas students. I stated that fact when my right hon. Friend the Foreign and Commonwealth Secretary announced that that money was being made available. The money is substantially for needy students. An additional 5,000 to 6,000 scholarships and awards will be available each year to them.
The method of funding of overseas students has changed. Formerly, overseas students were subsidised from part of the recurrent grant. That subsidy has been removed and overseas students who are not in receipt of special scholarships or under the aegis of the aid programme are expected to cover the full cost of their education. That is only right and just at a time when the number of home and EC students is probably being reduced.
Without the Bill, I would feel unable to justify my party's position on the funding of overseas students, because the policy would be changed by default, which is unacceptable and unsatisfactory. If the 5,000 to 6,000 extra scholarships a year go to new entrants, the total number of overseas students may well be up next year on the 1979–80 figure.
As a nation, we must make a real effort to give meaning and value to our young people's lives. Although some have been disappointed by their failure to gain a university place, we must not lose their talents. To that end, the Government funded scheme for the unemployed wishing to pursue a university education through the Open University is a contribution. That point has been overlooked in the debate. Another way of ensuring that our young people hold their heads up high is to close the loophole created in the other place and to see the Bill through, so that they do not see the university place or discretionary grant that they coveted going to a foreign student by default.

Mr. Peter Griffiths: My qualification for intervening at this late stage is that for


several years before 1979 I was the admissions tutor in one of the main departments of Portsmouth polytechnic and dealt on a day-to-day basis with the problems that have been discussed tonight.
Access to further education generally is fraught with all sorts of anomalies. The difference between mandatory and discretionary awards often seems arbitrary. The difference between the policies of one county and another in granting discretionary awards sometimes seems arbitrary. The parental contribution has sometines seemed unfair. In the best of all possible worlds we would get rid of such anomalies and offer free access to higher education for all, as the hon. Member for Sheffield, Heeley (Mr. Hooley) suggested. However, in the real world of limitation and of many more applications than places on courses in our universities, polytechnics and colleges of education, there must be an element of selection. That being so, it should be made on the basis suggested in the Bill and in the arrangements developed over the years rather than on the basis of those introduced by the right hon. Member for Crosby (Mrs. Williams) when she was Secretary of State. Her arrangements imposed on people such as me the almost impossible task of setting quotas of overseas and home students. As a result, we often had to select students according to their country of origin rather than on their academic ability.
I greatly resent the point made by the hon. Member for Lewisham, West (Mr. Price). He suggested that students were admitted to courses because they brought funds to Britain rather than because of their academic ability. As there are many non-academic qualifications for entry to all courses in higher education, that is not possible. The sweeping statement that we are bringing in many overseas students just to bolster the coffers does not fit well with the comments of the hon. Member for Bedwellty (Mr. Kinnock). He suggested that the full-cost fee system deprived our colleges of further education of the advantages of large numbers of overseas students.

Mr. Kinnock: The hon. Gentleman does not understand the economics of his own party. There has been a lack of resources in higher education because of the full-cost fee system, which has driven away students who would otherwise have gained access. As a result, institutions have to scour the world to invite students—whom they otherwise would not have invited, on academic grounds—to go to their institutions. By such means, universities can gain some finance by selling themselves as educational Hiltons, thus relieving the Government and conforming with their monetarist policies. The points made by my hon. Friend the Member for Lewisham, West (Mr. Price) and by me are perfectly compatible.

Mr. Griffiths: Those points may have a certain compatibility, but they are based on the assumption that students are necessarily wealthy because they come from wealthy countries or are poor because they come from poor countries. I have known many extremely wealthy students from Third world countries and many poor students from EC countries and North America. That sort of blanket statement is, therefore, most unhelpful. I do not wish to labour these points at this late stage in the evening.
If the Bill were not passed, the Government would be committed to spending sums that have been variously suggested as between £30 million and £50 million on providing for overseas students, however the money is to

be divided, courses at the same fee as that charged to home students. I should like to see all students on an equal basis. That is a worthy cause. However, we think—this was clearly implied in the speech of the hon. Member for Derby, North (Mr. Whitehead)—that that is not the top priority for spending that money. If we had that sum, it could be spent on various aspects of education, such as getting rid of anomalies in access to higher education. For that reason, much of the criticism of the Bill has been shadow boxing because we know that the Bill is essential to maintain a system. Neither side of the House would be prepared to spend that amount of money on removing the full cost fee for overseas students.

Mr. Whitehead: By leave of the House, Mr. Deputy Speaker.
I would point out to the hon. Member for Portsmouth, North (Mr. Griffiths) that nobody has said that it is not necessary to have a Bill—the criticisms are about this Bill. The criticisms have been fairly and forcefully expressed from the Opposition Benches, and to a degree that I hope will persuade the Secretary of State and the Minister that in Committee we shall not be fractious, but we shall scrutinise the Bill carefully. I said this at the outset, but it seems to have been forgotten. There are things about the Bill about which we feel most unhappy.
I am glad to be able to make a few comments on the speeches made tonight. I am always glad to start with the hon. Member for Wokingham (Sir W. van Straubenzee), who spoke with his customary eloquence. He is a Norman Hunter on ice—one is so struck by the elegant facade with which he approaches that one misses the boot until it has almost struck home. I am prepared to spell out to the hon. Gentleman Labour party policy which will be implemented shortly after the general election. [HoN. MEMBERS: "Oh!"] That was a feeble cry of dissent from the Conservative Benches. I shall comment on the hon. Gentleman's part in 1967, because there are curious parallels between what was said then and what has been said tonight, and with some of the criticisms of the Bill and its timing.
The Labour party's policy is in the excellent publication which I can recommend to the hon. Gentleman, on education after 18. I shall not bore the House with the whole section on education, but I shall give the final paragraph on page 20 for his further elucidation. We say that our priority is for a substantial expansion of the student sponsorship schemes of the ODA, and go on:
Preference should be given to entrants whose country of origin has a low GNP and students from low income families.
I accept that there are the differences within countries and between students, as the hon. Member for Portsmouth has said, but we have to make that distinction in going out to look where the need is greatest. The document continues:
Our highest priority must be poor students from poor countries. The ODA, in collaboration with reputable nongovernmental organisations such as Amnesty, Oxfam and Christian Aid, should also offer scholarships to students in Third World countries whose governments may refuse to sponsor them… Reciprocal exchange schemes should also be expanded All other overseas students (with the present exception of those from EEC countries) will continue to pay fees but"—
this is the point, and it is here that there is a major difference and argument between us—
the fees should be set at levels which properly reflect marginal costs and which are related to comparable fees elsewhere.


It is in those two areas that the problem is now at its most acute. I say in all seriousness to the hon. Gentleman that when he considers our practice now compared with that of some of our European partners and other countries such as the Soviet Union, he will see that the disincentive in the current fees, which do not reflect marginal costs and are extremely onerous for overseas students, is an area that must be tackled quickly. It is one of the factors that have made the problem so acute.
In his interesting speech, the hon. Member for Berwick-upon-Tweed (Mr. Beith) referred, among other things, to the representations that we have all had from the National Union of Students about hall fees and the extraordinary burden which those fees now place on overseas students, in contradistinction to home students. They are counted in with the fees those students have to pay in their institutions, yet they carry many overheads of the institutions that are not reflected in the residential cost, for example, that is charged to home students. It is in such areas — the distinction betweeen home and overseas students, the fees charged to them and the widening of the gap—that I am led to believe that we are have probably now reached almost the end of the process whereby the home student's fee is seen as anything more than an actuarial convenience for the Government of the day. We cannot go on pretending that it represents a fee at all.
Although I was not a Member in 1967, I accept what was said and, had I been here, I would have echoed the criticisms that were made of the late Mr. Crosland's statement. The hon. Member for Wokingham made three criticisms of the introduction of that legislation. First, he said that it had been introduced in a great hurry. There had been a statement the day before the recess. Surprise, surprise. I seem to remember that that is what happened on 30 March. Secondly, he said that there had not been adequate consultations and that the vice-chancellors and the local authorities had been unable to see the Minsiter. Thirdly, he said that the new rules appeared to be hastily drafted and were open to criticisms that might have been avoided had they come forward after more consideration.
All those criticisms apply to this legislation, and they could be, and indeed were, made by Labour Members. I wonder whether the spirit of Christmas past, revived by the hon. Gentleman today, will enthuse his actions in accepting that criticisms can be made of the manner in which this legislation has been brought forward.
If the hon. Gentleman believes that we are doing terribly well in non-advanced further education, he should look at the figures and the record set out by my hon. Friend the Member for Sheffield, Hooley—[HoN. MEMBERS: "Heeley."] Hooley and Heeley have been so indistinguishable in my mind for so many years that now that the link is to be broken I can say that if my hon. Friend were never to make another speech in the House he would be remembered by the one that he made tonight. He spoke today as a United Nations man; as someone who cares about what we do for the rest of the world. He spoke for the world as a community in terms that will simply not be understood by some Conservative Members. I shall remember his speech with affection and warmth.
The record of student numbers in non-advanced further education in the past three years is not a good one. For some reason, the hon. Member for Wokingham is seized of the number of Malaysian students swarming over

UWIST. I seem to recollect that at Question Time three or four months ago, his hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) asked about the falling number of Malaysians at Lancaster university. I went recently to Manchester polytechnic, not so far from there, where there had long been links with Malaysia. The main complaint was the enormous damage done not merely to studies at that institution but to relationships with Malaysia. That argument has been dealt with, so I shall not labour it.
I am glad that the Liberal party accepts with us that the negative procedure is not a proper way to discuss such regulations. It is farcical to believe that such matters can be dealt with in one and a half hours in Committee, followed by a procedural vote, when so many lives are affected. I hope that the draft regulations will be made available for scrutiny.
The hon. Member for Gravesend (Mr. Brinton) talked about the Select Committee's interim report and said, curiously, that we were distorting what happens in the universities and colleges. That was picked up by my hon. Friend the Member for Lewisham, West (Mr. Price). Some of our institutions of learning have to tout abroad for students who are acknowledged to be below our normal academic standards, when the standards are being raised for British students. That causes resentment among home students beyond that described by the hon. Member for Ealing, North (Mr. Greenway).
Hon. Members should see what is happening at the Gabbitas-Thring educational trust, the agency which is taking a 10 per cent. share of student fees. Public money goes to that agency for touting in the advanced countries for rich students who do not necessarily have the correct qualifications and who could almost certainly receive higher education in their own countries. Poor students are the subject of discrimination.
I could not understand the hon. Member for Lincoln (Mr. Carlisle) when he talked about living within our means and expressed other worthy sentiments. He said that it was right to cut back because we were discriminating against the wealthy. How on earth does he work that out? Gabbitas-Thring is in business in a big way recruiting the wealthiest students, so how can that be called discrimination against the wealthy? In the last few years the discrimination has been against the poorest.
The definition of "ordinary resident" has been mentioned. Those who read the report of our proceedings will be left in confusion about the meaning of the phrase in the Bill
not having such connection with the United Kingdom or any part of it as may be specified in the regulations".
What will the regulations contain? What should a "connection with the United Kingdom" be?
Will we say to people of foreign origin, "If you have been here for many years and did not have a thought in your mind to undertake higher education, you can apply for an award, but if you did have, wholly or in part, the aspiration to education, by heaven, you will not receive an award of any description."?

Mr. Hooley: Might not the position be that if a person prepares himself in no way for education he will qualify for an award, but that if he prepares himself he will be disqualified?

Mr. Whitehead: That thinking would commend itself to the Tory party. I do not believe that that is a sound educational principle and I am sure that it would not be supported outside.
We are told that people in Ealing and elsewhere are standing around talking of nothing else but the dreadful discrimination they may suffer if we do something for overseas students. The hon. Member for Ealing, North should be more concerned about the huge gulf between home and overseas students. We were told that we cannot do anything about that. We were told by the hon. Member for Ealing, North that we must accept the wide gulf between the two, but the wider the gulf becomes, the greater the sense of unfairness.
The sense of unfairness works both ways. It works on the home student, if he feels that the enormous fees for overseas students are to be alleviated. The sense of unfairness works equally on those who have to pay the fees. If there is no attempt to ameliorate the general position of those paying overseas fees, we shall reach the same position as we have with the death grant: every year the Government say that it is harder to do anything about it, because the burden is growing all the time.

Mr. Greenway: There is nothing notional about the constituents who complained to me about their difficulties in obtaining grants, compared with the generosity with which the Opposition appear to want indiscriminately to invite to this country large numbers of students from all over the world.

Mr. Kinnock: That is a notional front argument.

Mr. Whitehead: I will not pursue that too far.
If the constituents of the hon. Member for Ealing, North complain to him that there are not enough discretionary awards and that discretionary awards might go, as a result of the Lords ruling and if the Bill were other than it is, to overseas students, he could say to them, "Hang on for a minute fellows — who got rid of discretionary awards? Why are there no discretionary awards for home students? You cannot blame that on overseas students. Blame it on the Government's policies and on the fact that the clammy hands of the Department of the Environment and the now febrile and wizened paws of the Department of Education and Science have left the area of discretionary awards almost untenanted." That is what the hon. Gentleman should say to his constituents. If he does not, they will be left in error on these matters.
We understand why the Government are scuttling from one section of the Race Relations Act 1976 to another. They cannot now use section 41(2), because they must not differentiate among those in the country for different purposes. They are setting out a new purpose. They are saying that, if there is any educational intent on the part of those who come here, that is a reason to disqualify them from educational support. They must do that now under section 41(1) of the Act. They are doing so in circumstances which leave two major points of principle between us. First, nothing is being done in general for overseas students, given the fact that the fees they pay, the so-called full cost fees, have escalated as far as they have. Secondly, they are not offering the people specifically covered by the Bill any genuine interpretation of what an overseas student now is. I do not believe that the Under-Secretary of State, who is highly intelligent and

responsive, knows what an overseas student is. He knows that there is a shorthand term for it—but a squiggle is not a policy, nor an interpretation.
If we hear nothing else from the Under-Secretary, I hope that we hear what an overseas student is.

Mr. Waldegrave: With the leave of the House, Mr. Deputy Speaker. This has been a wide-ranging debate. We have dealt with Trident., farming and the propriety or otherwise of the negative procedure. Our Bill is more limited than that. It does not even deal with mandatory awards. They are dealt with under a different procedure. Nor does it deal with the level of fees. The argument whether it would be right to put fees at a long-run or short-run marginal cost level is conducted in the Overseas Students Trust report by the proponents and opponents of its recommendations. There is nothing in the Bill about the level of fees.
This is a Bill to take powers. I think that the hon. Member for Derby, North (Mr. Whitehead) and the hon. Member for Berwick-on-Tweed (Mr. Beith) accept that the powers will be needed. They give room for Government to follow different policies, and that is reasonable.
My hon. Friend the Member for Wokingham (Sir W. van Straubenzee), as usual, made one of the most powerful speeches, and managed to prick the humbug that surrounds some of the Opposition's remarks. Their argument in an attempt to counter the charge that they introduced the original discrimination is rather like the ancient joke about the unwanted baby— it did not matter if it was very small. They introduced the principle in 1967 and all Governments since then have maintained it.
I also agree strongly with my hon. Friend that in terms of future policy we are now in a strong position. It is in no way a criticism of the Department of Education and Science that decisions affecting national interests of varying kinds, including aid and humanitarian interests, are not within the capacity of the DES to take. Those are for the Departments of State that have responsibility for such matters. Under the leadership of the Foreign Office, we can now have a properly structured and targeted policy that, improves the situation.
Labour Members will say, as they do of every expenditure policy, that we must increase the expenditure by some factorial amount. That is their right while in prolonged opposition.
The hon. Members for Derby, North, Lewisham, West (Mr. Price) and some of my hon. Friends mentioned a number of the categories that could be helped under various changes of policy. We shall doubtless explore some of those categories in Committee. The hon. Member for Derby, North mentioned immigrants, and my hon. Friend the Member for Skipton (Mr. Watson) quoted an expatriate case. I can give no assurance that this year we shall make policy changes. Our stated intention is to restore the situation to what we thought it was. These are legitimate suggestions and proposals about which we shall argue in Committee and other forums.
I was asked once and for all to settle the definition of an overseas student. The whole purpose of the Bill and its regulations is to settle that definition. It will not be finally settled until the regulations are passed. The Bill provides the power to attach that definition, and that is what we shall explore in Committee.

Mr. Whitehead: In that case the hon. Gentleman can help me further now. Will the draft regulations be placed before the Committee?

Mr. Waldegrave: I can give no assurance that we shall have the draft regulations. The Committee will certainly have in front of it the principles that lie behind them. I can give the assurance that any consultative papers offered to those with whom we are consulting—as we shall be doing while the Committee is sitting—will also be put before the Committee.
The shape of the definition is clear from the Government's intentions. It will be related to three years' ordinary residence, excluding those here principally for educational purposes.

Mr. Kinnock: The hon. Gentleman will recognise that in Committee, in the manner of this Court of Parliament, we shall be taking a precise decision on what is an overseas student. While the hon. Gentleman is trustworthy and honourable, it is not enough to provide us with the shape of the definition, which will not be excused by being a little shape. Consequently, we shall have to insist on the wording of the proposed law so that we can refer to it and examine it.

Mr. Waldegrave: I cannot give the hon. Gentleman the assurance of having the draft regulation before the Committee, but I note what he says.
The debate ranged widely over the whole area of overseas students policy and took in a number of criticisms of the Foreign Secretary's scheme and of other schemes. Sone of the points, which were not germane to the Bill, I can lay to rest. The hon. Member for Berwick-upon-Tweed made some play with the different status of the dependent territories of France and of this country. The Foreign Secretary has made it clear that there will be the scheme for Hong Kong and that the other dependent territories will have home fee status.
Several hon. Members listed a number of changes in the law that they would like to see, and they will be legitimate arguments that we shall have in the years ahead. I repeat that our clear intention is to put the law back to what we thought it was and not, at present, to make large numbers of further concessions.
The hon. Member for Derby, North said sadly that the Government always seemed to start by counting the cost. I make no apology for that. It is right that those who stand here, backed distantly by the tremendous powers of taxation, should count the cost before charging into different areas of expenditure. This is indeed an area where we must take the electorate with us. We are kidding ourselves if we believe that the electorate understood the nature of the open-ended subsidy that existed for overseas students. Indeed, I do not think that some hon. Members fully understood it. I do not believe that any Government came to the House — say, in 1969 — and said, "We intend to multiply the number of overseas students by 300 per cent. over the next 10 years".
The numbers of university applicants from overseas are creeping up again, which I welcome, and the numbers who will be here after the full-cost fee policy has come through will probably be at about the levels they were in the mid-1970s. I do not remember the then Labour Government saying that we had far too few overseas students here in the mid-1970s. On the contrary, they were enmeshed in the most incomprehensible schemes—of quotas and so on—to try to control even those numbers. So there has been a touch of humbug in some of the comments.

Mr. Hooley: If the so-called open-ended subsidy is such an appalling phenomenon, why does every other country happily tolerate it?

Mr. Waldegrave: The hon. Gentleman is too optimistic about the intentions of other countries. Though other countries do not exercise control by fees, virtually every other country has some measure of control, some by using immigration procedures, an area in which we have never got involved in terms of students. The Australians do it by charging for student visas. There is a whole range of controls. The fact that other countries do not do it by fee control does no mean that no control is exercised by them.
My hon. Friend the Member for Skipton perhaps answered more clearly than I did the question why the Bill does not involve retrospection. There is no question of retrospection. The Government are taking no action in relation to the current year. Whether or not students are entitled to a refund of feees depends on the law as it stands. Students should not assume that they have any entitlement to a refund. Whatever the press have said, the Government have said nothing to encourage students to think that they have such an entitlement.
My hon. Friend the Member for Skipton was right to say that the Bill may result in some people's expectations being disappointed, but it would be nonsense to say that those expectations were in some sense retrospectively removed. It is in the nature of expectations that they are often disappointed, but there is no retrospection.
We shall return to many of the detailed points in Committee, particularly the detailed definition of what is going into the regulations. However, I welcome the fact that, although different parties with different policies on the matter criticise the contents of the Government's policy, we have not heard serious criticism of the need to take the powers to amend the policy, in whichever way various parties want. The Bill is brought before the House with the grudging approval of other parties—I will not put it higher than that. There is all-party support. There will be much legitimate argument about the way in which the powers that are taken in the Bill are used in future. Therefore, I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 42 (Committal of Bills).

Demonstrations (Policing)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Douglas Hogg.]

Mr. Michael McNair-Wilson: I am glad to have this opportunity to speak about the costs of policing demonstrations since my constituency, which takes in the whole of RAF Greenham Common, the atomic weapons research establishment at Aldermaston and the Royal Ordnance factory at Burghfield, is having more than its fair share of protests. It is widely known that last December 30,000 women took part in a demonstration around the perimeter fence at the Greenham Common airbase. Over Easter we were faced with 40,000 supporters of the Campaign for Nuclear Disarmament staging first a blockade of the Royal Ordnance factory at Burghfield and subsequently a 14-mile human chain stretching along the road from Burghfield via Aldermaston to RAF Greenham Common.
I am told that we are to have one, if not two, demonstrations in May and presumably there will be others up to and perhaps after cruise missiles are stationed at Greenham in December 1983, assuming that those at the intermediate nuclear force talks at Geneva fail to reach an agreement.
For this calendar year, Thames Valley police tell me that the estimated cost of policing all the demonstrations relating to the coming of cruise missiles to Greenham in 1983 is more than £1 million. Unless the Government help out, the whole of that cost will fall on the ratepayers of the Thames Valley police authority area.
That figure applies solely to providing police and has nothing to do with the legal costs of evicting some of the women from the common land on which they have pitched their tents illegally or the cost of clearing up the litter left on the common during the December demonstration, and other incidental expenses. I repeat that we are talking about a sum of more than £1 million as being the likely cost of policing the demonstrations this year.
Because that figure is so massive, I have found myself asking, "Why should those who wish to demonstrate in a way that will require a great deal of police manpower and huge expense expect to do so without contributing one penny piece towards the cost of the police presence?". At the moment the answer is "Because no law exists that says that they should." Anyway it is argued, "Would not such a charge interfere with the rights of each one of us to protest and demonstrate about our protests?"
If I thought that what I intend to suggest would deny the individual or small groups of individuals that right—any of us can think of demonstrations in our constituencies that consist of parents protesting about the closure of a local school or the demonstrations outside the town hall —I would not be raising this subject, but I am talking not about small local demonstrations but about the protest marches organised by national groups that are in possession of considerable funds, groups that plan their demonstrations professionally, produce publicity material, advertise, issue literature and pamphlets and have full-time staff. The CND, for instance, claims an annual income of over £400,000, not counting the £200,000 that it gets from the sale of books. It employs 28 persons. In short, I am talking about organisations which could book a football ground or a conference hall for a protest

demonstration if they were so minded, except that if they did so they would have to pay the cost of any police presence at a rate of about £100 per day for every policeman employed.
The annual cost of policing demonstrations is very large and is rising. I cite some examples. The National Front demonstration on Remembrance Day 1979 cost £313,000 and involved 4,497 policemen. The trade union march in March 1980 cost £144,000 and involved 1,814 policemen. The National Front march in Lewisham in April 1980 cost £300,000. The British Movement rally in London on 23 November 1980 cost £209,000 and involved 3,400 police. The women's demonstration at Greenham Common on 12–13 December 1982 cost £57,000 and required the presence of 633 officers.
I am told that the cost of policing the CND demonstration in my constituency on Good Friday this year will be more than £300,000—£43,700 for police pay and £252,000 for overtime, plus additional costs for transport, petrol, catering and signposting. That demonstration required more than 1,000 police to be on duty. As the Thames Valley police authority could not provide all the policemen because the number required was one third of the authority's total strength, it had to ask the Hampshire constabulary and the Metropolitan Police to help out.
I do not wish in any way to suggest that demonstrations have become peculiar to Berkshire. In a report of 7 August 1980 the Select Committee on Home Affairs stated that it had been told that the number of demonstrations in London had quadrupled in the past two decades. Two figures relating to London demonstrations bear that out. In 1979, the estimated gross cost of policing major demonstrations in the capital was £5·75 million. In 1981, the cost of policing major demonstrations, marches and meetings in metropolitan London requiring the presence of 100 or more police officers was £8·85 million, and that figure does not include the cost of the civil disturbances in Brixton and elsewhere. Naturally, I hope that we never reach comparable figures in Berkshire, but I am worried for my constituents and for those living in the Thames Valley police authority area.
In those terms, I ask my hon. and learned Friend the Minister of State whether the Home Office will reconsider the view that it expressed in the 1980 review of the Public Order Act 1936 when it stated that the practical difficulties in the way of imposing financial conditions on the organisers of marches and demonstrations were formidable and that the proposal could not profitably be pursued.
I suggest that the Department's stated preference for advance notice of processions on a nationwide basis—a system already operated in 107 local authority areas in England and Wales and three areas in Scotland—could help to remove some of the difficulties. If the law were changed to impose a statutory requirement that processions and demonstrations had to be notified in advance, those organising national demonstrations would have to contact the local authority and the chief constable in the chosen area before their protest could get under way.
If the law were further amended so that those organising a procession or demonstration requiring more than 100 police were required to pay part of the cost of the additional policing and to put down a deposit, the organisation planning the demonstration could decide for itself how big a protest it wished to mount, at least in terms of the cost of the policing required.
Of course, protesters are apt to believe that too many police are used. Only today, I received a letter from the chairman of the Northfield branch of CND in which he told me that, in his opinion, the Good Friday CND demonstration was "over-policed" and therefore so costly. He is writing with hindsight. He knows now that 40,000 demonstrators turned up. He does not know that, when CND talked to the Thames Valley police authority about the demonstration, it said that it expected a minimum of 40,000 demonstrators but could not guarantee that there would not be much more.
What should the chief constable have done? I suggest that his correct course was to have done precisely what he did, which was to have a force that was large enough to cope with 40,000 or more demonstrators and the enormous number of buses — it turned out to be 680 — which brought them to the demonstration. He had to have a force that was large enough to ensure that people who lived locally could go about their lawful business without let of hindrance, could cope with any violence or direct action that might arise and could ensure that the demonstrators could make their protest peacefully.
If CND had been asked to pay a percentage of policing its Good Friday demonstration, as would be the case under my proposal, it must be anybody's guess whether it would have decided to spread the demonstration along 14 miles of road, with all the policing that that required. CND might well have decided to concentrate the demonstration to keep down the cost. The choice would have been CND's. According to the funds that it was willing to spend, it could either have used its reserves to cover the cost of the demonstration or have asked the demonstrators to contribute something towards that cost, much as it did at the campsite and Burghfield where it asked for £1 per head.
There is, of course, another way in which to approach the problem that I have outlined. The demonstration organisers could enter a financial guarantee with the local authority to pay a part of whatever costs arise. However, that would not allow the organisers to have a say in the cost of their proposal and how that cost could be kept to a minimum.
Britain is in the middle of the largest crime wave in its history. Our police forces have a massive task in proving to society that crime does not pay. As we all agree, that means getting the bobby back on the beat and rebuilding confidence in the community. How can that be achieved if large numbers of police are constantly being taken off their regular duties to police demonstrations? Is it fair to the people who expect protection from the local police to discover that their police force is being bussed off to a demonstration in which they have no interest, but for which they will be asked to pay?

Mr. Michael Neubert: Perhaps I can strengthen my hon. Friend's already cogent case by drawing attention to London? Is he aware that more recent figures compiled by the Commissioner of Police of the Metropolis show that the number of demonstrations requiring the attendance of 100 or more police officers has increased from an average of one a week to one a day in nine years? The number has therefore increased seven

times in London rather than the quadrupling that my hon. Friend has mentioned. That has the same consequences for the campaign against crime, which is at a high level.

Mr. McNair-Wilson: I am very grateful for that intervention as it strengthens considerably the point I was making. As those police officers are drawn off to look after demonstrations, they leave areas under-policed when there is a crime wave and yet the people who will pay for those police officers are the very people who are being denuded of police cover.
The problem is even worse in Thames Valley. The police authority there has the smallest number of police per head of population anywhere in England, even if one includes the recent increase of 43 in its establishment.
I have said, and I repeat, that nothing in my proposals is aimed at depriving individuals or groups of their inalienable right to protest and demonstrate without being asked to pay for any policing that may be needed. All that I am saying is that when more than 100 policemen are needed, the organisers of a demonstration should make a contribution to the cost of policing, in fairness to the people who live locally and who must otherwise pay the bill. I am aware that CND makes a point of discussing its protests with the local authority and the police, and I am equally aware that ad hoc groups do not have such discussions, but if the law required advance notice of protests and demonstrations that problem could be overcome. The increasing cost of demonstrations would not fall entirely on the pockets of those who generally play no part in them, but would fall in part on those who instigate demonstrations, as fair play would demand that it should. I look forward to my hon. and learned Friend's reply.

The Minister of State, Home Office (Mr. Patrick Mayhew): I congratulate my hon. Friend the Member for Newbury (Mr. McNair-Wilson) on raising a matter of topical interest and of real concern. His constituency experience enables him to speak with direct and current knowledge about demonstrations and their implications, about the burden that they can place on the police, and therefore on those who pay for the police, and about the disrupting effects that demonstrations can have on the community. I pay warm tribute to the skilful and professional manner in which Thames Valley police and its reinforcements from other forces have coped with the challenge. I also express sincere sympathy for his constituents, whose interests in such matters he has so diligently represented in the House from the outset. Scant consideration has been shown for them by those who have descended upon them from outside and often subjected them to squalor and obstruction.
We must uphold the freedom to demonstrate within the law on the one hand and, on the other, the rights of ordinary citizens to go about their business and pleasure without obstruction or inconvenience. My hon. Friend has made an eloquent and timely speech on behalf of the latter, at whose general and sometimes personal expense, both in money and amenities, the freedom to demonstrate is exercised. But he has not overlooked the profound importance to all of us—and he emphasised it in his closing words — of peaceful assembly and of public protest within the law. They are no less important when,


however paradoxically, they are exercised in support of policies that may be thought likely to lead to their removal, if ever they were implemented.
For many years Governments have been reluctant to propose, and Parliaments reluctant to enact, changes in the law that would restrict the freedom to organise and to take part in demonstrations. In 1936 our predecessors, worried by the violence caused by marches by the British Union of Fascists through the east end of London, passed the Public Order Act of that year. However, the regulatory powers of that Act to impose conditions on marches and, in the last resort, to ban them, can be exercised on only one criterion — the apprehension of the police that serious public disorder cannot otherwise be avoided. Similarly, the common law powers of the police in respect of static demonstrations, for example to move or disperse them, are governed by the need to prevent or to deal with breaches of the peace.
In the light of recent events, it is not surprising that some people sometimes believe that those constitutional arrangements tip the balance too much in favour of demonstrators, and too much against the interests of the wider community. The cost of policing demonstrations has featured prominently in this regard. Nevertheless, as my right hon. Friend the Home Secretary has made clear, the policing of demonstrations is a proper duty for the police, as proper as the duties of preventing and detecting crime. Chief officers of police do their best to police demonstrations as economically as possible, and as far as possible without impairing their effectiveness in other areas. I entirely agree with what my hon. Friend said in response to the protest made to him by the local branch of the CND that one demonstration had been over-policed. What are the police to do when they are told that a minimum of 40,000 people may attend a demonstration? They must have officers there in reserve to meet contingencies, and they would be greatly criticised if they were found wanting in that respect.
There is no denying that in recent years the duty of policing demonstrations has placed an increasing burden on the resources of the police service. That is one of the reasons why we embarked upon the review of the Public Order Act 1936 and related legislation. The review began with the Green Paper in 1980 and its scope was extended following the civil disorders in 1981. The review has been wide-ranging but we hope to announce its conclusions before too long. Tonight's debate highlights some of the most important factors.
As my hon. Friend has noted, the costs of policing demonstrations can be considerable. For example, the chief constable of the Thames Valley police estimates that the total manpower costs of policing the demonstrations over Easter at Greenham common, Burghfield and Aldermaston were about £340,000, of which about £252,000 was attributable to additional costs over the four days. The whole of the cost does not fall upon the ratepayers, as 50 per cent. is reimbursed under the ordinary arrangements for reimbursing police expenditure from central Government funds. That means that 50 per cent. of the cost was able to be passed on. None the less, the net cost to my hon. Friend's ratepayers was considerable.
Secondly, the number of demonstrations has been rising. As my hon. Friend the Member for Romford (Mr. Neubert) said in an intervention, between 1972 and 1981 the number of demonstrations in London requiring the

presence of 100 or more officers rose from 55 to 352. In broad terms, that is an increase in such demonstrations from an average of one a week to one every day.
Thirdly, the impact of such demonstrations upon the freedom of movement and general amenities of the public has increased. It is therefore understandable that requests have been made that the Government consider whether at least the cost to the public occasioned by demonstrations can be properly reduced.
My hon. Friend has asked why those who wish to demonstrate in a way that is costly in police manpower should expect to do so without contributing a penny, to use his phrase, towards the cost of the police attendance. He made it clear that he was not discussing small local demonstrations—for example, parents protesting against the closure of a local school. He had in mind the protest marches and demonstrations, sometimes prolonged, that are organised by national groups that are sometimes possessed of substantial funds. He asked the Government to consider changing the opinion that they expressed in 1980, when they published the Green Paper. We there expressly referred, in paragragh 64, to
suggestions that have been made from time to time that financial conditions should be imposed on the organisers of marches and demonstrations; for example, that they should be required to meet some or all of the cost of the policing arrangements or that they might be required to enter into a bond from which they would be expected to meet the cost of any damage resulting from the march.
As the foreword to the Green Paper made clear, it was our hope that the paper would lead to a full and informed debate. None the less, the difficulties inherent in the proposals were such that we thought it right to set out our opinion there and then, and we did so in these words:
There are obvious theoretical attractions in making those whose activities occasion disorder liable for the cost, and the Government has a good deal of sympathy with the feelings that often lie behind these suggestions. However, the practical difficulties about such proposals seem formidable. First, it can be argued that it is unreasonable to hold the organiser of what is intended to be a peaceful march responsible for the activities of elements who may join the march but over whom he may have no control. Equally … events have shown that responsibility for disorder occasioned by marches can be caused almost wholly by counter-demonstrations seeking to disrupt the march, rather than by those taking part. Ai other times, the blame is more or less equally shared. Then there is the objection of principle that imposing financial restrictions of this sort would in effect be taking away the exercise of a fundamental freedom. The effect of a requirement for a financial guarantee might ultimately be to restrict marches to those on uncontroversial issues and organised by people of considerable financial means. For these reasons, the Government doubts whether these suggestions can profitably be pursued".
That was said in 1980. As the context of the Green Paper makes clear, the comments applied equally to static demonstrations and marches. To those difficulties can be added the fact that organisation has to be proved, and that is not an easy matter in every instance.
These suggestions remain under consideration until the review is concluded, as we have stated on a number of occsions since 1980, most recently in my written answer last week to my hon. Friend the Member for Christchurch and Lymington (Mr. Adley). We shall give our final conclusion in the announcement of the review as a whole, and I cannot anticipate that tonight.
My right hon. Friend will naturally want to take into account what my hon. Friend the Member for Newbury has said tonight together with the increased numbers of demonstrations and their greater impact upon the


convenience of the community to which I have referred. Lest my answer last week, however, should wrongly be taken as indicating that the Government has already decided to change its approach to these problems I must make it clear that this is not so. We will be continuing with our review and bringing it to a conclusion but it is fair to say that the practical difficulties to which we referred in 1980 do not seem to have become less formidable since then.
We shall certainly wish to consider, however, as indicated in the Green Paper, my hon. Friend's suggestion that notice should have to be given of demonstrations and processions to local authorities and chief officers of police, although the inclusion of demonstrations raises wider issues of statutory control.
I sympathise with my hon. Friend's attraction to the idea of linking an advance notice requirement to a charge on the organisers when the event would require the presence of a specific number— say, 100 — of police officers. But there could be serious, practical difficulties. For example, it could appear to constrain the operational discretion of the police, who might anticipate that only a lesser number of officers would be required but then find on the day that it was necessary to deploy more than 100 men. The arrangement could encourage opponents to a demonstration to attempt to join it, in order to have the charge incurred. That itself would increase the potential for disorder, and so policing and other costs.
Our conclusions will certainly also deal with other measures to improve co-operation between the police and demonstrators, among many other matters.
Lest it be thought that the entire cost of demonstrations falls on the locality involved and that the Government make no contribution, it is important to emphasise the constitutional position.
The Police Act 1964 provides for a partnership between central and local government on policing which is reflected in the arrangements for financing the police service. Police expenditure qualifies for a 50 per cent. specific grant from the Government and is taken into account for the purposes of the rate support grant settlement. So the Government are already sharing the financial burden with the ratepayers of the three counties.
Complete indemnity and reimbursement, for example, for the cost of policing demonstrations with a national significance would upset the balance of our policing arrangements approved by Parliament in much more than financial terms. It would carry the implication that the Home Secretary should have some direct control of the police operation in question. This is something that very few people would find acceptable. Nor is it something that my hon. Friend advocated.
For the Government's part, we hope that the conclusions of our review of public order will, when we announce them, help to improve the legal framework in a complex and controversial area. The police will continue to carry out its duty impartially to maintain the peace and prevent the commission of offences.
But it is only right that the public should be able to know the scale of expense and dislocation falling upon them consequent upon any exercise of the right to demonstrate as it is understood. Demonstrations are intended to influence public opinion, and in a democratic parliamentary society among the things that go to make up public opinion is a healthy sense of proportion and of what is fair and reasonable. To that informing process, which I regard as extremely important, the debate initiated by my hon. Friend has contributed most notably tonight.

Question put and agreed to.

Adjourned accordingly at twenty-two minutes to midnight.